Ricky owns stock in Dove Corporation His adjusted basis for the stock is $90,000 During the year, he receives a distribution from the corporation of $75,000 that is labeled a return of capital (i e , Dove has no earnings and profits) a Determine the tax consequences to Ricky b Assume instead that t...

a The 75000 distribution is labeled a return of capital becaus ...

Ricky owns stock in Dove Corporation. His adjusted basis for the stock is $90,000. During the year,

Question:

Ricky owns stock in Dove His adjusted basis for the stock is $90,000. During the year, he receives a from the of $75,000 that is labeled a return of capital (i.e., Dove has no earnings and profits).
a. Determine the tax consequences to Ricky.
b. Assume instead that the amount of the is $150,000. Determine the tax consequences to Ricky.
c. Assume instead in (a) that the $75,000 is labeled a taxable (i.e., Dove has earnings and profits of at least $75,000).
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...