plz help 16. Assume the same facts as the prece ding question. Wha.pdf
0 likes•13 views
The document presents a series of scenario-based questions related to tax implications and accounting for corporate distributions, including stock basis, gain recognition, and determination of dividends. It outlines examples of cash and land transactions involving corporations and their effect on the individuals involved. Additionally, it discusses how corporate distributions relate to earnings and profits, influencing what is considered a dividend.
1 of 1
Download to read offline
More Related Content
Similar to plz help 16. Assume the same facts as the prece ding question. Wha.pdf (20)
Ad
More from rd1742 (20)
Ad
Recently uploaded (20)
plz help 16. Assume the same facts as the prece ding question. Wha.pdf
- 1. plz help 16. Assume the same facts as the prece ding question. What is Jane's basis in the stock she received? a. $30,000 c. $70,000 b. $10,000 d. $50,000 17. Lew transfers $10,000 cash and land to X Corp. in exchange for all of its stock. The land has an adjusted basis =$70,000 and a fair market value =$125,000 immediately before the exchange. X Corp. assumes a $100,000 mortgage on the land for a valid business purpose. What result to Lew? a. He recognizes $20,000 gain c. He recognizes $30,000 gain b. He does not recognize any gain d. Herecognizes $100,000 gain 18. A dividend is a distribution of property from a corporation to its shareholders and: a. is presumed to come out of the earliest c. is presumed to come out of E&P to the accumulated earnings and profits (E&P) extent there is E&P, and then from the most recent E& P first b. is presumed to come out of paid-in capital d. is presumed to come out of the retained accounts earnings account 19. Lelco Corp oration, a calendar-year corporation, had a tough time for its first few years but is now doing better. On Jan. 1 of the current year, it has an accumulated E&P=($60,000), a deficit. However, its current E&P, measured as of 12/31,=$30,000. Jelso distributes $20,000 to its shareholders during the current year. How much of the distribution is a dividend? a. $20,000 c. $30,000 b. $15,000 d. Cannotbe determined 20. Z Corp. had a good year. As a result, it made three distributions to its sole shareholder, Ms. Zane, during the year as follows: February 25: $40,000; July 29:$48,000; Oct. 19:$72,000 Also, current E&P=$60,000; accumulated E&P=$40,000