I. In each of the following independent situations, determine the dividends received deduction. Assume that none...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
I. In each of the following independent situations, determine the dividends received deduction. Assume that none of the corporate shareholders own 20% or more of the stock in the corporations paying the dividend. Tiger Corp. 700,000 Bear Cat Corp. 800,000 Mustang Corp. Income from operations Expenses from operations (600.000) (4 Points) Sara, an individual, owns 100% of the outstanding stock in Mississippi Gulf Coast Corp. Sara purchased the stock 1 years ago, and her basis is $15,000. At the beginning of 2019, the corporation has $15,000 of accumulated E&P and a current E&P of $56,000 (before considering the effect of the distribution). What are the tax consequences to Sara and the corporation? A. 2. Gain or loss recognized by Sara 700,000 Mississippi Gulf Coast Corp. distributes land to Sara. The land was held as an investment and has a fair market value (FMV) of $30,000 and an adjusted basis of $18,000. The land is subject to a note of $10,000 which Sara assumes. 1. Gain or loss recognized by Mississippi Gulf Coast Corp. 3. Basis of the land to Sara 4. Effect on E&P due to the distribution Page 1 In each of the following independent situations, determine the dividends received deduction. Assume that none of the corporate shareholders own 20% or more of the stock in the corporations paying the dividend. Income from operations Expenses from operations Qualifying dividends A. B. Tiger Corp. 700,000 (600,000) 100,000 Bear Cat Corp. 800,000 (900,000) 200,000 What is the DRD for the Tiger Corp? What is the DRD for the Bear Cat Corp? Mustang Corp. 700,000 (740,000) 200,000 C. What is the DRD for the Mustang Corp? III. (6 Points) Kim's basis in a partnership is $40,000. Kim receives a pro rata liquidating distribution consisting of $21,000 cash and her proportionate share of land #1 with a basis of $5,000 to the partnership and a fair market value of $10,000 and land #2 with a basis of $6,000 and a fair market value of $5,000. Required: What gain or loss, if any, would Kim recognize upon receiving the distribution? A. B. What basis will Kim receive in land #1? Search documents and file names for text C. What basis will Kim receive in land #2? For each of the following independent statements, indicate whether the tax is applicable to partnerships (P), S Corporations (S), both partnerships and S Corporations (B), or neither business form (N). A. Flow-through to owners of net operating losses. B. C. D. E. F. Flow-through to owners of net capital losses. Unrestricted selection of taxable year. An increase in the organization's trade account payables will increase the tax basis of the owner's interests. An owner's share of losses in excess of tax basis can be carried forward indefinitely. A nonliquidating distribution of appreciated property is generally not taxable to the owners. G. H. Income retained in the business will not be taxed to the owners until distributed to them. Organizational costs can be amortized over a 180-month period. Page 4 I. In each of the following independent situations, determine the dividends received deduction. Assume that none of the corporate shareholders own 20% or more of the stock in the corporations paying the dividend. Tiger Corp. 700,000 Bear Cat Corp. 800,000 Mustang Corp. Income from operations Expenses from operations (600.000) (4 Points) Sara, an individual, owns 100% of the outstanding stock in Mississippi Gulf Coast Corp. Sara purchased the stock 1 years ago, and her basis is $15,000. At the beginning of 2019, the corporation has $15,000 of accumulated E&P and a current E&P of $56,000 (before considering the effect of the distribution). What are the tax consequences to Sara and the corporation? A. 2. Gain or loss recognized by Sara 700,000 Mississippi Gulf Coast Corp. distributes land to Sara. The land was held as an investment and has a fair market value (FMV) of $30,000 and an adjusted basis of $18,000. The land is subject to a note of $10,000 which Sara assumes. 1. Gain or loss recognized by Mississippi Gulf Coast Corp. 3. Basis of the land to Sara 4. Effect on E&P due to the distribution Page 1 In each of the following independent situations, determine the dividends received deduction. Assume that none of the corporate shareholders own 20% or more of the stock in the corporations paying the dividend. Income from operations Expenses from operations Qualifying dividends A. B. Tiger Corp. 700,000 (600,000) 100,000 Bear Cat Corp. 800,000 (900,000) 200,000 What is the DRD for the Tiger Corp? What is the DRD for the Bear Cat Corp? Mustang Corp. 700,000 (740,000) 200,000 C. What is the DRD for the Mustang Corp? III. (6 Points) Kim's basis in a partnership is $40,000. Kim receives a pro rata liquidating distribution consisting of $21,000 cash and her proportionate share of land #1 with a basis of $5,000 to the partnership and a fair market value of $10,000 and land #2 with a basis of $6,000 and a fair market value of $5,000. Required: What gain or loss, if any, would Kim recognize upon receiving the distribution? A. B. What basis will Kim receive in land #1? Search documents and file names for text C. What basis will Kim receive in land #2? For each of the following independent statements, indicate whether the tax is applicable to partnerships (P), S Corporations (S), both partnerships and S Corporations (B), or neither business form (N). A. Flow-through to owners of net operating losses. B. C. D. E. F. Flow-through to owners of net capital losses. Unrestricted selection of taxable year. An increase in the organization's trade account payables will increase the tax basis of the owner's interests. An owner's share of losses in excess of tax basis can be carried forward indefinitely. A nonliquidating distribution of appreciated property is generally not taxable to the owners. G. H. Income retained in the business will not be taxed to the owners until distributed to them. Organizational costs can be amortized over a 180-month period. Page 4
Expert Answer:
Answer rating: 100% (QA)
Here are the tax consequences of the distribution 1 Gain or loss recognized by Mississippi Gulf Coas... View the full answer
Related Book For
South Western Federal Taxation 2015
ISBN: 9781305310810
38th Edition
Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young
Posted Date:
Students also viewed these finance questions
-
In each of the following independent situations, determine the dividends received deduction. Assume that none of the corporate shareholders owns 20% or more of the stock in the corporations paying...
-
help me pls P acquired \( 80 \% \) of the capital of S on 1 January 2021. At the year end 31 December 2021 the two companies have the following statements of financial position: Notes 1....
-
Table 3.8 shows information on the demand and supply for bicycles, where the quantities of bicycles are measured in thousands. a. What is the quantity demanded and the quantity supplied at a price of...
-
Each table of values gives several points that lie on a line. Find the slope of the line. X -1 y 8 9 0 2 2 3 O
-
Repeat the calculations of Example 6.3, but for \(80 \mathrm{~mol} \%\) of the liquid distilled. Data From Example 6.3:- Suppose the liquid of Example 6.1 [50 mol% n-heptane (A), 50 mol% n-octane...
-
The University of Miami bookstore stocks textbooks in preparation for sales each semester. It normally relies on departmental forecasts and preregistration records to determine how many copies of a...
-
Suppose mortality follows Demoivre's law with @ = 110 and that the interest rate is 0. A term insurance policy on (60) has a level death benefit of 1000 payable at the moment of death provided this...
-
Review of Significant Events: List key events from the last five years, such as acquisitions, divestitures, new products and/or markets, and changes in management. Look for a timeline or history on...
-
Solve the equation 5.3g+9=2.39 + 15. a. Find the value of g. b. Explain how you can check that the value you found for g is correct. If your check does not work, does that mean that your result is...
-
Solve the system equation 12 6 6 || 1623 + + *246 y 63 -4
-
Blair sells an acre of land (with potential environmental issues) to Abby for $200,000. Blair receives a demand promissory note with a face amount of $200,000 bearing adequate interest. However, due...
-
2. Firms HD and LD are identical except for their use of debt and the interest rates they pay--HD has more debt and thus must pay a higher interest rate. Based on the data given below, how much...
-
One year ago today you bought a 6% coupon bond with a face value of 100 and 5 years to maturity for a price of 102.47. The bond pays interest annually. In the meantime the yield to maturity for the...
-
import java.util.List; import java.util.ArrayList; /* * * This program loops through an array list of strings and finds the longest string */ public class FindLongest { /* * Given the array list of...
-
Audrey purchases a riding lawnmower using a 2-year, no-interest deferred payment plan at Lawn Depot for x dollars. There was a down payment of d dollars and a monthly payment of m dollars. Express...
-
Go to the U.S. Tax Court website (www.ustaxcourt.gov). a. What different types of cases can be found on the site? b. What is a Summary Opinion? Find one. c. What is a Memorandum Opinion? Find one. d....
-
Compute the overvaluation penalty for each of the following independent cases involving the fair market value of charitable contribution property. In each case, assume a marginal income tax rate of...
-
Andrea entered into a 529 qualified tuition program for the benefit of her daughter, Joanna. Andrea contributed $15,000 to the fund. The fund balance had accumulated to $25,000 by the time Joanna...
-
Reconsider the data of Problem 31. Data from Problem 31 The following three investment opportunities are available. The returns for each investment for each year vary, but the first cost of each is...
-
The following three investment opportunities are available. The returns for each investment for each year vary, but the first cost of each is $20,000. Based on a future worth analysis, which...
-
Explain the relationship between the finite sample \(F\)-test and the large sample \(\chi^{2}\)-test, and the assumptions under which each is suitable.
Study smarter with the SolutionInn App