9 When making non-cash distributions where the fair market value of the property distirbuted exceeds its adjusted basis, corporations must: a. Defer the gain until such time as the recipient shareholder disposes of all stock in the corporation b. Disclose the adjusted basis info to the recipient shareholder so the shareholder may recognize the gain upon disposition. c. Recognize gain under IRC 311

9 When making non-cash distributions where the fair market value of the property distirbuted exceeds its adjusted basis, corporations must: a. Defer the gain until such time as the recipient shareholder disposes of all stock in the corporation b. Disclose the adjusted basis info to the recipient shareholder so the shareholder may recognize the gain upon disposition. c. Recognize gain under IRC 311

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter6: Corporations: Redemptions And Liquidations

Section: Chapter Questions

Problem 3BCRQ

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Recipients of a distributions under IRC Section 302(b)(3) are eligible for capital gain treatment only if the distributing corporation does not have earnings and profits. True or False Explanation
1. When a shareholder receives a noncash distribution of property that is encumbered by a liability (the shareholder assumes the liability on the distribution), how does the shareholder determine the amount of the distribution?
when a C-Corp distributes appreciated assets to its shareholders should recognize in in the corporate return a taxable profit on the appreciation?
In general, a liquidating corporation recognizes both gains and losses. Question 14 options: True False
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33. A purchaser of a business will generally prefer which of the following? An asset purchase to receive new basis for depreciation A stock purchase because the seller will receive capital gains Utilizing a §338(g) election If the selling entity is an S Corporation making a joint §338(h)(10) election All of the above A,C,&D What form is required to report the allocation of the purchase price? ____________
In a transaction involving the transfer of corporate and partnership interests in which the special valuation rules under IRC Chapter 14 apply, which one of the following statements is CORRECT? A) The interest retained by the transferor must be valued at zero if this retained interest is not a qualified interest. B) The interest given to the transferee/recipient must be valued at zero if the transferee is not given a qualified interest. C) The interest retained by the transferor must be valued at zero if this retained interest is a qualified interest. D) The interest given to the transferee must be valued at zero if the transferee is given a qualified interest.
11 Which of the following events will be considered to be a disposal for capital gains tax purposes (1) The selling of shares in a subsidiary (ii) Expropriation of property (iii) The transfer of an asset due to failure to pay debt (iv) The granting of an option by a company to acquire a share in it (v) The obtaining of any credit from a person
TRUE OR FALSE 2. if there is sufficient proof that the acquisition has been made for a business purpose and the shareholders of the target firm will be compensated with voting shareholders of the target firm will be compensated with voting shares in the acquiring firm, the acquisition will be non-taxable.
6. What is the proper treatment for noncash asset received from a non-stockholder? Group of answer choices a. The share premium shall be credited for the fair value of the noncash asset. b. The share premium shall be credited for the book value of the noncash asset. c. The income account shall be credited for the fair value of the noncash asset. d. The income account shall be credited for the book value of the noncash asset.
9. Which of the following situations will result to a not a future taxable amount? A. Carrying amount of the asset > tax base of the asset B. Tax base of the asset > carrying amount of the asset C. Carrying amount of the liability Taxable income 10. Statement 1: IAS 12 par. 70 states that when an enterprise makes a distinction between current and non- current assets and liabilities in its financial statements, it should classify deferred tax assets (liabilities) as noncurrent assets (liabilities). Statement 2: Corporation is obliged to pay to BIR the lower between the Basic Corporate Income Tax (BCIT) and Minimum Corporate Income Tax (MCIT). A. Only statement 1 is correct C. Both statements are correct D. Both statements are incorrect B. Only statement 2 is correct
18. What is the proper treatment for noncash asset received from a stockholder? Group of answer choices a. The share premium shall be credited for the fair value of the noncash asset. b. The share premium shall be credited for the book value of the noncash asset. c. The income account shall be credited for the fair value of the noncash asset. d. The income account shall be credited for the book value of the noncash asset.