In each of the following situations complete the blanks Distribution (cash) S/H Basis in Stock Corporate E&P
Question:
In each of the following situations complete the blanks
Distribution (cash) | S/H Basis in Stock | Corporate E&P | Dividend | Return of Capital | Capital Gain |
50,000 | 20,000 | 500,000 | |||
200,000 | 50,000 | 20,000 | |||
100,000 | 20,000 | 300,000 | |||
130,000 | 500,000 | 20,000 | |||
130,000 | 500,000 | 500,000 | |||
700,000 | 800,000 | 20,000 | |||
20,000 | 800,000 | 500,000 |
XYZ Corporation has one shareholder. The shareholder’s tax basis in his shares is $60,000. Corporate E&P BEFORE the effects of any distribution is $10,000. The corporation distributes the following property. Explain the tax effect to the corporation and to the sole shareholder. The corporation distributes land with a FMV of $120,000 and a tax basis to the corporation of $70,000.
Economics of Strategy
ISBN: 978-1118319185
6th edition
Authors: David Besanko, David Dranove, Mark Shanley, Scott Schaefer