E13 X Jx 2 3 4 5 A B D E F G 2. Use the...

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E13 X Jx 2 3 4 5 A B D E F G 2. Use the same facts as in Problem 1 (Tar Heel Corporation), as to the amount of accumulated E&P, the dates, the land's fair market value, adjusted tax basis, and mortgage distributed to William Roy at the end of the year. However, now assume Tar Heel has a current E&P than is Negative and is $50,000 less than their accumulated E&P (for example, if the accumulated E&P is $500,000, the current E&P would be ($450,000))- Also, William has a stock basis in his Tar Heel stock of $30,000 and a dividend and capital gain tax rate of 15%. The distribution does not qualify as a stock redemption, but would be classified as a qualified dividend. Fill in the template below. Nonliquidating Distribution (Dividend Treatment) Nonliquidating Distribution (Dividend Treatment) 6 Effect on Corporation: 7 8 Gain Recognized by corporation: 9 FMV of Property (or Liability if Greater) $ 150,000 $ 30,000 $ 120,000 10 less: Adjusted Basis to corporation 11 Realized & Recognized Gain 12 (Do NOT Recognize Loss!) 13 14 Tax paid on gain by corporation: 15 Gain Recognized 16 x Marginal Corp.Tax Rate 17 Tax Paid by Corporation 18 19 Available E&P for Distribution: 20 Current E&P 21 Accumulated E&P 22 E&P Available for Distribution 23 24 E&P Available: 25 E&P Available for Distribution 26 plus: Gain Recognized 27 less: Greater of FMV (or Liability if Greater) or AB 28 plus: Liabilities 29 less: Tax on gain 30 E&P Available as a Dividend $ 150,000 1596 $ 22,500 31 32 E13 X Jx 2 3 4 5 A B D E F G 2. Use the same facts as in Problem 1 (Tar Heel Corporation), as to the amount of accumulated E&P, the dates, the land's fair market value, adjusted tax basis, and mortgage distributed to William Roy at the end of the year. However, now assume Tar Heel has a current E&P than is Negative and is $50,000 less than their accumulated E&P (for example, if the accumulated E&P is $500,000, the current E&P would be ($450,000))- Also, William has a stock basis in his Tar Heel stock of $30,000 and a dividend and capital gain tax rate of 15%. The distribution does not qualify as a stock redemption, but would be classified as a qualified dividend. Fill in the template below. Nonliquidating Distribution (Dividend Treatment) Nonliquidating Distribution (Dividend Treatment) 6 Effect on Corporation: 7 8 Gain Recognized by corporation: 9 FMV of Property (or Liability if Greater) $ 150,000 $ 30,000 $ 120,000 10 less: Adjusted Basis to corporation 11 Realized & Recognized Gain 12 (Do NOT Recognize Loss!) 13 14 Tax paid on gain by corporation: 15 Gain Recognized 16 x Marginal Corp.Tax Rate 17 Tax Paid by Corporation 18 19 Available E&P for Distribution: 20 Current E&P 21 Accumulated E&P 22 E&P Available for Distribution 23 24 E&P Available: 25 E&P Available for Distribution 26 plus: Gain Recognized 27 less: Greater of FMV (or Liability if Greater) or AB 28 plus: Liabilities 29 less: Tax on gain 30 E&P Available as a Dividend $ 150,000 1596 $ 22,500 31 32