Kim is an employee of Azure Corporation. In the current year, she receives a cash salary of
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Question:
Kim is an employee of Azure Corporation. In the current year, she receives a cash salary of $81,000 and also is given 50 shares of Azure stock for services she renders to the corporation. The shares in Azure Corporation are worth $2,500 each.
a. How will the transfer of the 50 shares to Kim be handled for tax purposes?
Kim has $125,000 of ordinary income. Kim reduces her compensation by the fair market value of the stock received. There is no gain or loss due to § 351.Kim has $125,000 of ordinary income.
b. What is Azure Corporation's total compensation deduction for Kim's services?
Related Book For
South Western Federal Taxation 2016 Corporations Partnerships Estates and Trusts
ISBN: 9781305399884
39th edition
Authors: James Boyd, William Hoffman, Raabe, David Maloney, Young
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