A inherited 100% of Corp. X from her mothers estate. Original Stock Basis was $100,000, FMV of
Question:
A inherited 100% of Corp. X from her mother’s estate. Original Stock Basis was $100,000, FMV of Corp. X at Mom’s death was $300,000, and Corp. X has E&P of $250,000. On June 15, 2022, X makes a distribution of $100,000. X completely liquidates on 12/31/2022 when basis of its assets are $100,000.
a. How is the 6/15/2022 distribution taxed (1 -2 words) _______________________________ b. Code Section for Part a. above §__________
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c. Does Corp. X report any gain/loss on liquidation and if so enter amount and character ___________________
d. Give Code Section for Part c §__________
e. Does A recognize any Gain/Loss and if so, give amount and category. _____________ f. Code Section(s) for Part e. §__________
35. X Corp. assets FMV $2,500,000; Basis $500,000. X Corp. completely liquidates and distributes its assets to A, the sole Shareholder. Shareholder A’s stock basis is $250,000.
Is a formal plan of dissolution required? §__________
What Form is required for X to file to report the liquidation? ___________
Compute Corporate gain/loss indicate amount and category
___________________________________________________________________________ _____________________________________________________________________ ________________________________________________________________________
Code Section for Part c §__________
Compute Corporate Tax $___________________________________________________
________________________________________________________________________
Compute A’s gain/loss. $___________________________________________________
________________________________________________________________________
Code Section for Part f §__________
Assume A is in the maximum tax bracket what is the tax rate applicable to A? (ignore any
surtax) _________________
What is A’s basis in the property received? _________________
Code Section for Part i. Be specific. §__________
If X Corp. was a 100% subsidiary of Y Corp. does X recognize a gain on liquidation and if
so, compute amount. $___________________________________________________
________________________________________________________________________
Code Section(s) for Part k §_____________
What is Y Corp’s basis in the assets in Part k? $____________
Code Section for Part m. Be Specific. §_____________
Taxation Of Individuals And Business Entities 2023 Edition
ISBN: 9781265790295
14th Edition
Authors: Brian Spilker, Benjamin Ayers, John Barrick, Troy Lewis, John Robinson, Connie Weaver, Ronald Worsham