CorpInc is a CCPC that benefits from the small business deduction (SBD) and pays non-eligible dividends only.
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Question:
CorpInc is a CCPC that benefits from the small business deduction (SBD) and pays non-eligible dividends only. In its first two years it issued shares to shareholder as follows:
Year 1:
- 1,500 common shares to ShX for $3,000
- 2,000 common shares to ShY for $6,000
Year 2:
- 5,000 preferred shares to ShX for $5,000
- 5,000 preferred shares to ShY for $5,000
In Year 3, a new shareholder, ShZ, purchased all of ShX's common shares for $8,000 and all of ShX's preferred shares for $4,000.
In Year 4, CorpInc redeemed all preferred shares at $4 per share.
What is the effect of the Year 4 redemption on ShZ's net income?
Related Book For
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
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