On December 24 of the preceding year. Y and Terry incorporated X and capitalized X with...
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On December 24 of the preceding year. Y and Terry incorporated X and capitalized X with cash of $100 each. On December 31 of that preceding year, Y and Terry received distributions from X of $5 each; X did not earn any income for that year. In addition, Y and Terry received distributions of $5 each, in the current year. Which distributions should be gross income to Y and Terry, in what amounts, and why? What does E&P have to do with this? Alternatively, assume that Terry just bought the X shares on December 30 of the current year from another shareholder for FMV of $145, before the declaration and payment of a $5 distribution to Terry on December 31 of the current year. Should the distribution be taxable income to Terry? Why? On December 24 of the preceding year. Y and Terry incorporated X and capitalized X with cash of $100 each. On December 31 of that preceding year, Y and Terry received distributions from X of $5 each; X did not earn any income for that year. In addition, Y and Terry received distributions of $5 each, in the current year. Which distributions should be gross income to Y and Terry, in what amounts, and why? What does E&P have to do with this? Alternatively, assume that Terry just bought the X shares on December 30 of the current year from another shareholder for FMV of $145, before the declaration and payment of a $5 distribution to Terry on December 31 of the current year. Should the distribution be taxable income to Terry? Why?
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situation and the expense ramifications of the dispersions 1 Dispersion and Gross Pay On December 2 of the previous year Tery consolidated X and promo... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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