Rock Corporation distributed property with a fair market value of $100,000 and an adjusted basis of $70,000 to Ann, a shareholder of Rock Corporation.  Prior to the distribution, Rock Corporation had a deficit in accumulated earnings and profits of $200,000 and current earnings and profits of $20,000. Ann  has stock basis in Rock Corporations of $90,000. How much of this distribution  to Ann is dividend, return or capital, and capital gain.

Helen owns 30% of a flow-through entity.  The capital gain comes from the sale of a piece of equipment that Helen contributed to the entity.  At the time of contribution, the piece of equipment had a basis of $45,000 and a fair market value of $50,000.  The entity reports the following amounts before any payments to the owners:   O/S      Item                                                     Amount Sales Revenue                                     30,000             Dividends received                             10,000 Tax-exempt interest income               15,000 Capital gain                                           5,000 Charitable contributions                       1,000 Cost of Goods Sold                             10,000 General Business Expenses                  3,000   a) In the O/S column above, write ‘O’ for any ordinary business items and write ‘S’ for any separately stated items.   b) Assume that the entity is an S-Corp, and that Helen is also an employee of the…

Windy Company has taxable income before DRD of $200,000. Included in that amount is a $10,000 dividend from a domestic corporation owned 10% by Windy and a $20,000 dividend from a domestic corporation owned 60% by Windy. What is the taxable income of Windy Company?     $182,000.     $170,000.     $187,000.     $183,50

Abrams Company is a sole proprietorship. The book value of its identifiable net assets is $400,000, and the fair value of the same net assets is $600,000. It is agreed that the business is worth $850,000. What advantage might there be for the seller if the company is exchanged for the common stock of another corporation as opposed to receiving cash? Consider both the immediate and future impact.

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.

X Corp, a personal holding company, is owned by two individuals and has gross income as follows: $30,000 gross profits from sales, tax-exempt interest of $3,000, dividends of $5,000 from a 10% owned corporation, and taxable interest of $40,000. What is the amount of X Corp's personal holding company income?

Brett and Illain formed a new Corporation by transferring the following assets in exchange for stock:▪ Brett transferred: Property subject to a 70,000 mortgage; FMV $1,000000, Basis 500,000. In exchange, she received 200 shares of Stock and relief of the mortgage liability. ▪ Illain transferred: Inventory with a Basis of 15,000 and FMV 150,000. Required:a. What is Brett’s basis in the stock she received b. What is Brett’s recognized gain/loss

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What is the stock basis for Harold in the following: Harold transfers the following to a newly formed corporation: Land (basis of $50,000 and FMV of $100,000) Building (basis of $50,000 and FMV of $400,000) Accounts payable of $10,000 (for business supplies) Notes Payable 1 for building improvements of $185,000 Oa Zero (original basis plus gain recognized less liabilities transferred) Ob s05,000 the gain recognized Oc $5,000 (the gain recognized less original basin) Od $100,000 ($50 - 150) O. 1S05,000) (8100,000 basis less 8195,000 gain)