4. A tract of land is distributed to Martha Moore as a dividend. Its basis immediately prior to the distribution was $40,000, its value is $80,000, and it is subject to a mortgage of $55,000. The following statements concerning the distribution are all false except: OA. The shareholder's basis in the

4. A tract of land is distributed to Martha Moore as a dividend. Its basis immediately prior to the distribution was $40,000, its value is $80,000, and it is subject to a mortgage of $55,000. The following statements concerning the distribution are all false except: OA. The shareholder's basis in the

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter5: Corporations: Earnings & Profits And Dividend Distributions

Section: Chapter Questions

Problem 39P

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5. (a) A transfers a contract to perform services to Newco in exchange for 50% of Newco's stock. B transfers a tract of land with a basis of 50 and FMV of 100 in exchange for 50% of Newco's stock. What are the tax consequences to all of the parties? (b) Suppose that in addition to transferring the services contract, A transfers cash of 20. A still receives 50% of the stock. How would this change your answer?
5. (a) A transfers a contract to perform services to Newco in exchange for 50% of Newco's stock. B transfers a tract of land with a basis of 50 and FMV of 100 in exchange for 50% of Newco's stock. What are the tax consequences to all of the parties? (b) Suppose that in addition to transferring the services contract, A transfers cash of 20. A still receives 5096 of the stock. How would this change your answer? () Suppose instead that in addition to transferring the services contract, A transfers cash of just 1 How would this change your answer?
An S-Corporation has ownership of a piece of land with an adjusted basis of $10,000 and a FMV of $100,000. It distributes this land to a shareholder, what basis would the shareholder have in this land? a. $0 b. It would depend on the shareholder's inside basis c. $90,000 d. $100,000 e. $10,000
Amazon Corporation distributes equipment (basis of $80,000 and fair market value of $100,000) as a property dividend to its shareholders. The equipment is subject to a liability of $120,000. Amazon Corporation recognizes gain of: a. $0 b. $20,000. c. $30,000. d. $40,000. e. None of the choices.
(3) XYZ Corporation redeems a portion of its stock owned by one of its shareholders, Black. The corporation redeems Black's shares by distributing to him a parcel of real property with a FMV of $420,000 and an adjusted basis in the hands of XYZ Corporation of $245,000. What is the amount of gain, if any; XYZ Corporation will recognize that under the following circumstances? (a) The redemption fails to satisfy any of the tests of §302(b) and therefore fails to fit within the provisions of §302(a) and is required to be tested under §301? (b) The redemption satisfies the test set forth in §302(b)(2) and therefore does fit within the provisions of §302(a).
The Berry Corporation owns a building with a basis of $40,000 that is subject to a debt of $ 160,000. The FMV of the building is $100,000. Berry distributes the property in a nonliquidating distribution (along with the debt) to Delia, its sole shareholder. What is the amount of the distribution to Delia? a. $80,000. b. $50,000. c. zero. d. $30,000. e. none of the above.
Plainwell Ice Cream Corporation distributed property with a $300,000 fair market value and $20,000 adjusted basis to Luis, one of its shareholders. The property was subject to a $150,000 mortgage, which Luis assumed. Plainwell Ice Cream Corporation E & P is $200,000. How much of the property distribution is treated as dividend income, if any? How much gain, if any, does Plainwell Ice Cream Corporation recognize?
The Tomato Corporation owns a building with a basis of $40,000 that is subject to a debt of $160,000. The FMV of the building is $100,000. Tomato distributes the property in a nonliquidating distribution (along with the debt) to Mitch, its sole shareholder. What is the amount of the distribution to Mitch? a. $80,000. b. $50,000. c. zero. d. $30,000. e. none of the above.
1 An S corporation distributes land with a basis of $60,000 and a FMV of $90,000 to its sole shareholder. The tax results of the distribution will be Group of answer choices no gain recognized by the corporation but $30,000 of gain recognized by the shareholder. no gain to the corporation or to the shareholder. $30,000 of gain recognized by the S corporation and no pass-through to the shareholder. $30,000 of gain recognized by the S corporation which is passed through to the shareholder.
Abel Corp., an S corp., distributes property to a shareholder named Jay. Immediately before the distribution, the basis of Jay's investment in Abel Corp. totaled $31,000. Additional information follows: Adjusted basis of the property at the distribution date: $20,000 FMV of the property at the distribution date: $19,000 a. What is Jay's basis in his stock investment after the distribution? b. What is Jay's basis in the property after the distribution? c. What amount of loss would Abel Corp. recognize as a result of the distribution?
Craig received a $25,000 distribution from Yellow Corporation that the corporation identified as $15,000 dividend and $10,000 return of capital. What effect does this distribution have on Craig’s taxable income if his basis in the stock of Yellow is $8,000? a. Increase of $25,000 b. Increase of $17,000 c. Increase of $15,000 d. Increase of $10,000 Samuel Co. has had taxable income of $450,000, $570,000, $760,000 and $680,000 in years 2013 through 2016, respectively. What were the equal minimum quarterly estimated tax payments for 2016 that Samuel Co. should have made in 2016 to avoid any penalty? a. $58,000 b. $64,676 c. $57,676 d. $170,000 Which of the following is not a separately stated item on a partnership’s Schedule K? a. A $5,000 long---term capital loss b. $20,000 of unrecaptured Section 1250 c. $3,000 charitable contribution d. $5,000 bond interest e. All are separately stated. Ryan is a 30 percent general partner in ABC Partnership. His basis in his partnership interest at…
Global Corporation distributed property with an $850,000 fair market value and a $415,000 adjusted basis to one of its shareholders. The property was subject to a $230,000 mortgage, which the shareholder assumed. Global has ample E & P to cover any distribution made during the year. What is the amount of the shareholder’s dividend income on the distribution? What is the shareholder’s basis in the property received? For the shareholder: What is the amount of the distribution? What is the basis of the property in the shareholder's hands? For the corporation: Is a gain or loss recognized as a result of the distribution? What is the effect of the distribution on E & P?