The White Summer Ski Lodge, Inc. has one class of common stock owned as follows: 20% by Winston Green 18% by Winston's nephew, Vincent 17% by Winston's old high school friend, Bud ( Bud and Winston both invested in the Landview Limited Real Estate partnership). 25% by a trust with Winston's wife Sylvia as trustee. The equal beneficiaries are Sylvia's mother, Kimberly, and Winston's brother, Kirk. 20% by Kirk's wife, Hester. Winston owns, directly or indirectly, the following percentage of the stock in the corporation: a. 82% b. 100% c. 49.5% d. 69.5%

The White Summer Ski Lodge, Inc. has one class of common stock owned as follows: 20% by Winston Green 18% by Winston's nephew, Vincent 17% by Winston's old high school friend, Bud ( Bud and Winston both invested in the Landview Limited Real Estate partnership). 25% by a trust with Winston's wife Sylvia as trustee. The equal beneficiaries are Sylvia's mother, Kimberly, and Winston's brother, Kirk. 20% by Kirk's wife, Hester. Winston owns, directly or indirectly, the following percentage of the stock in the corporation: a. 82% b. 100% c. 49.5% d. 69.5%

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter6: Corporations: Redemptions And Liquidations

Section: Chapter Questions

Problem 52P

See similar textbooks

Similar questions

Frog Corporation is owned equally by Sandy, her husband Tom, her daughter Caitlin, and her grandmother, Martha. Each shareholder owns 200 shares in the company. Under the family attribution rules, how many shares of Frog stock is Sandy deemed to own? Multiple Choice 200 400 600 800
John owns 6,000 shares of KLM stock, 2,000 shares of BBT Mutual fund, and 10,000 shares of Centex Corporation. Her 1099-DIV forms from these investments showed the following: KLM: $3 per share distribution all reinvested in KLM BBT Mutual fund: $5 per share distribution, $1 of which represents a capital gain distribution; none of this is reinvested. Centex: $2 per share distribution, all of which represents a return of capital. How much must John include in his income in the current year? a. $40,000 b. $28,000 c. $48,000 d. $19,000
Jamestown, Inc. is family-owned C-corporation whose stock is not traded on an exchange. Jamestown, Inc. stock is owned as follows: · Virginia 6,000 shares · Miles 8,000 shares · John 2,000 shares · Hope 4,000 shares · Z corporation 3,000 shares · VM partnership 2,000 shares · Total shares issued & outstanding 25,000 shares Virginia would like to redeem 3,000 shares of her stock. The stock has a fair market value of $500,000 and Virginia has a basis of $150/share for her stock. Here are the relationships Virginia has with the other shareholders of Jamestown, Inc.: · Miles is Virginia’s older brother · John is Virginia’s father · Hope is Virginia’s sister · Virginia owns 60% of the stock of Z corporation · Virginia has a partnership interest of 30% in VM partnership. a. How many shares of stock is Virginia deemed to own in Jamestown, Inc. b. Assume that Virginia is in the 37% tax bracket. How much tax would Virginia owe if the transaction above (i.e. the redemption of 3,000 share of…
Dover Corporation owns 18% of Hassan, Inc.'s voting stock. The remaining Hassan stock is held by a diverse group of investors with small stakes. Monica Kurtz, Dover's president and a member of Hassan's board of directors, has a strong influence on Hassan's policies. Dover's net income rises as it receives dividends from Hassan under the market value method of accounting for investments. Dover pays President Kurtz a bonus based on a percentage of the company's net income. As a result, Kurtz can exert some control over her personal bonus by influencing Hassan's dividends. In 20X0, there is a recession, and corporate income is low. Kurtz wields enough power to have Hassan, Inc. pay a large cash dividend. The action requires Hassan borrowing so much money that he may face financial difficulties. Required: In getting Hassan to pay the large cash dividend, is Kurtz acting within her authority as a member of the Hassan board of directors? Are Kurtz s actions ethical? whom can her actions…
Jamestown, Inc. is family-owned C-corporation whose stock is not traded on an exchange. Jamestown, Inc. stock is owned as follows: Virginia 6,000 shares ● Miles 8,000 shares ● John 2,000 shares ● Hope 4,000 shares ● Z corporation 3,000 shares VM partnership 2,000 shares ● Total shares issued & outstanding 25,000 shares Virginia would like to redeem 3,000 shares of her stock. The stock has a fair market value of $500,000 and Virginia has a basis of $150/share for her stock. Here are the relationships Virginia has with the other shareholders of Jamestown, Inc.: Miles is Virginia's older brother John is Virginia's father ● Hope is Virginia's sister ● Virginia owns 60% of the stock of Z corporation Virginia has a partnership interest of 30% in VM partnership. a. How many shares of stock is Virginia deemed to own in Jamestown, Inc. b. Assume that Virginia is in the 37% tax bracket. How much tax would Virginia owe if the transaction above (i.e. the redemption of 3,000 share of her Jamestown…
All of the stock in Green Corporation (E & P of $240,000) is held by three unrelated individuals as follows: Rashad has 15 shares, Keshia has 15 shares, and Jose owns 20 shares. Green Corporation redeems 10 of Jose’s shares (basis of $36,000) for $40,000. If Jose’s stock is a capital asset and has been held for the requisite holding period, he has a long-term capital gain of $4,000 Group of answer choices True False
Lee owns 100% of the shares in Aerodynamic Limited. Lee’s wife, Sandy, owns 100% of the shares in Biodynamic Limited. Are Aerodynamic and Biodynamic associates? If Sandy doesn't have any shares, does Sandy associated with Aerodynamic Limited?If Lee also has a family trust of which he is the settlor. Is Aerodynamic Limited and the Trust associated?
At a point when Robin Corporation has been in existence for six years, shareholder Ted transfers real estate (with an 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% is owned by Ted and 21% by Peggy. a. What were the parties trying to accomplish? Ted is attempting to meet the control? requirement of § 351. In order to qualify as a taxable? exchange under § 351, Peggy must join Ted in the transaction. If the requirements are not met, $____ on the transfer will be recognized as a gain? to Ted. b. Complete the following statement regarding whether this plan will work.The Regulations provide that stock issued for property whose value is relatively small? compared to the fair market value of the assets? will not be treated as issued in return for…
Ann and Paul are shareholders of Android Corporation. Each has a stock basis of $10,000. Android has $21,000 of current E&P and $6,000 of accumulated E&P. Android distributes $12,000 to Anne on July 31 and to Paul $24,000 On December 1. What is Ann’s dividend income (if any)? What is Ann’s capital gain? (if any)? What is Paul’s dividend income (if any)? What is Paul’s capital gain (if any)?
Four unrelated shareholders own Benton Corporation's 400 shares of outstanding stock. As indicated below, Benton redeems a total of 100 shares for $500 per share from three of its shareholders. Each shareholder has a $230 per share basis in his or her stock. Benton's current and accumulated earnings and profits (E&P) at the end of the tax year is $150,000. View the shareholder data. Read the requirements. to Ethel, Fran, and Georgia? Ethel Fran Georgia Amount of income, gain, or loss Ethel Fran Georgia Character of income, gain, or loss Amount of income, gain, or loss 50,000 0 50,000 capital gain capital gain capital gain Requirement b. How would your answer to Part a change if Ethel were Georgia's mother? Character of income, gain, or loss dividend income return of capital Basis of remaining shares dividend income Basis of remaining shares Shareholder Data Shareholder Ethel Fran Georgia Henry Total Shares Held Before the Redemption Print 200 100 50 50 400 Done Shares Redeemed 40 30 30…
Bonnie and Clyde are the only two shareholders in Getaway Corporation. Bonnie owns 60 shares with a basis of $4,400, and Clyde owns the remaining 40 shares with a basis of $13,500. At year-end, Getaway is considering different alternatives for redeeming some shares of stock. Evaluate whether each of the following stock redemption transactions will qualify for sale and exchange treatment. (Leave no answer blank. Enter zero if applicable.) Required: a. Getaway redeems 10 of Bonnie's shares for $3,000. Getaway has $29,000 of E&P at year-end and Bonnie is unrelated to Clyde. b. Getaway redeems 25 of Bonnie's shares for $6,000. Getaway has $29,000 of E&P at year-end and Bonnie is unrelated to Clyde. c. Getaway redeems 8 of Clyde's shares for $3,500. Getaway has $29,000 of E&P at year-end and Clyde is unrelated to Bonnie. Complete this question by entering your answers in the tabs below. Req A Req B Req C Getaway redeems 10 of Bonnie's shares for $3,000. Getaway has $29,000 of E&P at…
Bonnie and Clyde are the only two shareholders in Getaway Corporation. Bonnie owns 60 shares with a basis of $4,400, and Clyde owns the remaining 40 shares with a basis of $13,500. At year-end, Getaway is considering different alternatives for redeeming some shares of stock. Evaluate whether each of the following stock redemption transactions will qualify for sale and exchange treatment. (Leave no answer blank. Enter zero if applicable.) Required: a. Getaway redeems 10 of Bonnie's shares for $3,000. Getaway has $29,000 of E&P at year-end and Bonnie is unrelated to Clyde. b. Getaway redeems 25 of Bonnie's shares for $6,000. Getaway has $29,000 of E&P at year-end and Bonnie is unrelated to Clyde. c. Getaway redeems 8 of Clyde's shares for $3,500. Getaway has $29,000 of E&P at year-end and Clyde is unrelated to Bonnie. Complete this question by entering your answers in the tabs below. Req A Req B Req C Getaway redeems 10 of Bonnie's shares for $3,000. Getaway has $29,000 of E&P at…