The company that issued the stock that Anita owns just declared a three-for-one stock split earlier this week. How was the value of Anita’s stock affected by the split?   The value of Anita’s investment in the company was unaffected by the stock split.   The value of Anita’s investment in the company decreased.

comet company is owned equally by Pat and his sister Pam, each of whom hold 140 shares in the company. Pam wants to reduce her ownership in the company, and it was decided that the company will redeem 70 of her shares for $1,400 per share on December 31, 20x3. Pam's income tax basis in each share is $700. comet has total E&P of $270,000. What are the tax consequences to Pam because of the stock redemption? Multiple Choice  ___ $49,000 capital gain and a tax basis in each of her remaining shares of $700. ___ $49,000 capital gain and a tax basis in each of her remaining shares of $140. ___ $98,000 dividend and a tax basis in each of her remaining shares of $140. ___ $98,000 dividend and a tax basis in each of her remaining shares of $70.

Liam, a shareholder in Lager, Inc., (a C corporation), would like to sell 800 of his shares of stock in Lager. Since Lager is not traded on an exchange, the only way to sell is the stock is by having Lager redeem the stock.   The fair market value of the 800 shares of stock is $200,000. Liam purchased the stock 10 years ago for $95/share. Lager has E&P of $700,000. The corporate stock in Lager is held as follows: Liam                                                                                       2,000 shares Jennifer (Liam’s sister)                                                   2,000 shares Katherine (Liam’s mother)                                           2,000 shares Beer Partnerships (Liam has a 30% interest)         4,000 shares                                                                                     10,000 shares How do you calculate the 800 shares of Liam’s stock to be treated as a qualified stock redemption or will it be treated as a distribution?

Cameron purchases stock in Corporation X and in Corporation Y. Neither corporation pays dividends. The stocks both earn an identical before-tax rate of return. Cameron sells stock in Corporation X after three years and he sells the stock in Corporation Y after five years. Which investment likely earned a greater after-tax return? Why?

Arden purchased 300 shares of AMC common stock (NYSE: AMC) several years ago for $1,500. On April 30, Arden sold the shares of AMC common for $500 and then purchased 250 shares of AMC preferred stock two days later for $700. The AMC preferred stock is not convertible into AMC common stock. What is Arden's deductible loss from the sale of the 300 shares of AMC common stock? Blank 1 What regulation sections leads you to this conclusion? Blank 2 Blank 1 Add your answer Blank 2 Add your answer

At a point when Robin Corporation has been in existence for six years, share- holder Ted transfers real estate (adjusted basis of $20,000 and fair market value of $100,000) to the corporation for additional stock. At the same time, Peggy, the other shareholder, acquires one share of stock for cash. After the two transfers, the percentages of stock ownership are as follows: 79% by Ted and 21% by Peggy. What were the parties trying to accomplish? Will it work? Explain.

William owns 200 shares of Data General stock. He purchased the stock for $20 a share. He sold her stock for $25 a share. The commissions required to buy and sell his stock totaled $130. Assuming that He received no dividends during the time she owned the stock, what is his total return for this transaction?

Rahul

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