Two Hearts Corporation is a calendar year taxpayer. Polly owns all of its stock. Her basis...
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Two Hearts Corporation is a calendar year taxpayer. Polly owns all of its stock. Her basis for the stock is $6,000. On April 1 of the current (non-leap) year Two Hearts distributes $54,000 to Polly. Determine the tax consequences of the cash distribution in each of the following independent situations: a. Current E&P of $24,000; accumulated E&P of $18,000. b. Current E&P of $33,000; accumulated E&P deficit of $(22,000). c. Current E&P deficit of S(68,000); accumulated E&P of $50,000. d. Current E&P deficit of S(30,000); accumulated E&P deficit of S(15,000). (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar. Complete all input fields. For zero amounts, make sure to enter "0" in the appropriate cell. Use parentheses or a minus sign for losses and E&P deficits.) a. b. C. Distribution 54,000 $ 54,000 $ 54,000 Dividend income (42.000) $ (33.000) $ (33,233) Remaining distribution %24 12,000 $ 21,000 $ 20,767 Return of Capital (6.000) $ (6.000) $ (6,000) 6,000 $ 15,000 $ 14,767 Capital gain (loss) Carryforward Accumulated E&P (22.000) %24 %24 Two Hearts Corporation is a calendar year taxpayer. Polly owns all of its stock. Her basis for the stock is $6,000. On April 1 of the current (non-leap) year Two Hearts distributes $54,000 to Polly. Determine the tax consequences of the cash distribution in each of the following independent situations: a. Current E&P of $24,000; accumulated E&P of $18,000. b. Current E&P of $33,000; accumulated E&P deficit of $(22,000). c. Current E&P deficit of S(68,000); accumulated E&P of $50,000. d. Current E&P deficit of S(30,000); accumulated E&P deficit of S(15,000). (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar. Complete all input fields. For zero amounts, make sure to enter "0" in the appropriate cell. Use parentheses or a minus sign for losses and E&P deficits.) a. b. C. Distribution 54,000 $ 54,000 $ 54,000 Dividend income (42.000) $ (33.000) $ (33,233) Remaining distribution %24 12,000 $ 21,000 $ 20,767 Return of Capital (6.000) $ (6.000) $ (6,000) 6,000 $ 15,000 $ 14,767 Capital gain (loss) Carryforward Accumulated E&P (22.000) %24 %24
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Answer rating: 100% (QA)
ANSWER Particulars A B C D Distribution 54000 54000 54000 54000 Dividend Income 42000 33000 0 0 Rema... View the full answer
Related Book For
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
Posted Date:
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