(1) XYZ Corporation is a calendar-year corporation. Ann and Paul each own 50% of the corporation's...

 

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(1) XYZ Corporation is a calendar-year corporation. Ann and Paul each own 50% of the corporation's stock. Ann's adjusted basis in her XYZ stock is 7,800 and Paul's adjusted basis in his stock is $4,300. During the year 2019, XYZ makes the following cash distributions split equally between Ann and Paul: April 30 October 31 $15,000 $10,000 What is the amount, character and source of each section 301 distribution to Ann and Paul under each of the following assumptions? (a) and Profits for 2019 of $16,000 all of which is attributable to the period May 1 through December 31. Accumulated Earnings and Profits as of 1/1/19 of $-0-. Current Earnings (b) and Profits for 2019 of $8,000. Accumulated Earnings and Profits as of 1/1/19 of $12,000. Current Earnings (c) Accumulated Earnings and Profits as of 1/1/19 of negative $15,000. Current Earnings and Profits for 2019 of $22,000. (1) XYZ Corporation is a calendar-year corporation. Ann and Paul each own 50% of the corporation's stock. Ann's adjusted basis in her XYZ stock is 7,800 and Paul's adjusted basis in his stock is $4,300. During the year 2019, XYZ makes the following cash distributions split equally between Ann and Paul: April 30 October 31 $15,000 $10,000 What is the amount, character and source of each section 301 distribution to Ann and Paul under each of the following assumptions? (a) and Profits for 2019 of $16,000 all of which is attributable to the period May 1 through December 31. Accumulated Earnings and Profits as of 1/1/19 of $-0-. Current Earnings (b) and Profits for 2019 of $8,000. Accumulated Earnings and Profits as of 1/1/19 of $12,000. Current Earnings (c) Accumulated Earnings and Profits as of 1/1/19 of negative $15,000. Current Earnings and Profits for 2019 of $22,000.

Answer rating: 100% (QA)

Assuming that the corporations only income for 2019 is from earnings and profits the distribution wo... View the full answer