Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
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Question
Chapter 12, Problem 6IRP
To determine
Identify the tax issue(s) and state each issue in the form of a question.
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Pine Corporation, a calendar-year corporation, was formed three years ago by its sole shareholder, Connor, who has
always operated it as a C corporation. However, at the beginning of this year, Connor made a qualifying S election for Pine
Corporation, effective January 1. Pine Corporation reported $70,000 of C corporation earnings and profits on the effective
date of the S election. This year (its first S corporation year), Pine Corporation reported business income of $50,000.
Connor's basis in his Pine Corporation stock at the beginning of the year was $15,000.
What are the amount and character of income or gain Connor must recognize on the following alternative distributions,
and what is his basis in his Pine Corporation stock at the end of the year? (Leave no answer blank. Enter zero if
applicable. Enter N/A if not applicable.)
d. Connor received a $150,000 distribution from Pine Corporation at the end of the year.
Character
Amount
Capital gain
Dividend
Stock basis
Pine Corporation, a calendar-year corporation, was formed three years ago by its sole shareholder, Connor, who has
always operated it as a C corporation. However, at the beginning of this year, Connor made a qualifying S election for Pine
Corporation, effective January 1. Pine Corporation reported $70,000 of C corporation earnings and profits on the effective
date of the S election. This year (its first S corporation year), Pine Corporation reported business income of $50,000.
Connor's basis in his Pine Corporation stock at the beginning of the year was $15,000.
What are the amount and character of income or gain Connor must recognize on the following alternative distributions,
and what is his basis in his Pine Corporation stock at the end of the year? (Leave no answer blank. Enter zero if
applicable. Enter N/A if not applicable.)
a. Connor received a $40,000 distribution from Pine Corporation at the end of the year.
Character
Amount
N/A
N/A
Stock basis
Pine Corporation, a calendar-year corporation, was formed three years ago by its sole shareholder, Connor, who has
always operated it as a C corporation. However, at the beginning of this year, Connor made a qualifying S election for Pine
Corporation, effective January 1. Pine Corporation reported $70,000 of C corporation earnings and profits on the effective
date of the S election. This year (its first S corporation year), Pine Corporation reported business income of $50,000.
Connor's basis in his Pine Corporation stock at the beginning of the year was $15,000.
What are the amount and character of income or gain Connor must recognize on the following alternative distributions,
and what is his basis in his Pine Corporation stock at the end of the year? (Leave no answer blank. Enter zero if
applicable. Enter N/A if not applicable.)
Problem 22-71 Part b (Static)
b. Connor received a $60,000 distribution from Pine Corporation at the end of the year.
Answer is complete but not entirely…
Chapter 12 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 12 - Mr. and Mrs. Velotta are self-employed...Ch. 12 - Prob. 2QPDCh. 12 - Ms. Johnson is eager to create a family...Ch. 12 - Discuss the tax and nontax reasons why the stock...Ch. 12 - Mr. Eros operates an antique store located on the...Ch. 12 - Prob. 6QPDCh. 12 - Prob. 7QPDCh. 12 - Prob. 8QPDCh. 12 - Prob. 9QPDCh. 12 - Prob. 10QPD
Ch. 12 - Prob. 11QPDCh. 12 - Ms. Knox recently loaned 20,000 to her closely...Ch. 12 - Explain the logic of the tax rate for both the...Ch. 12 - Prob. 14QPDCh. 12 - Prob. 15QPDCh. 12 - Prob. 16QPDCh. 12 - Mr. Tuck and Ms. Under organized a new business as...Ch. 12 - Grant and Marvin organized a new business as a...Ch. 12 - Prob. 3APCh. 12 - Ms. Kona owns a 10 percent interest in Carlton...Ch. 12 - Mrs. Franklin, who is in the 37 percent tax...Ch. 12 - Prob. 6APCh. 12 - Prob. 7APCh. 12 - Prob. 8APCh. 12 - Prob. 9APCh. 12 - Prob. 10APCh. 12 - Prob. 11APCh. 12 - Prob. 12APCh. 12 - Prob. 13APCh. 12 - Ms. Xie, who is in the 37 percent tax bracket, is...Ch. 12 - Prob. 15APCh. 12 - In 1994, Mr. and Mrs. Adams formed ADC by...Ch. 12 - Prob. 17APCh. 12 - Prob. 18APCh. 12 - Prob. 19APCh. 12 - Prob. 20APCh. 12 - Prob. 21APCh. 12 - Prob. 1IRPCh. 12 - Prob. 2IRPCh. 12 - Prob. 3IRPCh. 12 - REW Inc. is closely held by six members of the REW...Ch. 12 - Prob. 5IRPCh. 12 - Prob. 6IRPCh. 12 - Prob. 7IRPCh. 12 - Prob. 8IRPCh. 12 - Prob. 9IRPCh. 12 - Prob. 10IRPCh. 12 - Prob. 2TPCCh. 12 - Prob. 3TPC
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