(1) XYZ Corporation is a calendar-year corporation. Ann and Paul each own 50% of the corporation's stock. Ann's adjusted basis in her XYZ stock is 7,800 and Paul's adjusted basis in his stock is $4,300. During the year 2019, XYZ makes the following cash distributions split equally between Ann and Paul: April 30 October 31 $15,000 $10,000 What is the amount, character and source of each section 301 distribution to Ann and Paul under each of the following assumptions? (a) Accumulated Earnings and Profits as of 1/1/19 of $-0-. Current Earnings and Profits for 2019 of $16,000 all of which is attributable to the period May 1 through December 31. (b) Accumulated Earnings and Profits as of 1/1/19 of $12,000. Current Earnings and Profits for 2019 of $8,000. (c) Accumulated Earnings and Profits as of 1/1/19 of negative $15,000. Current Earnings and Profits for 2019 of $22,000.

(1) XYZ Corporation is a calendar-year corporation. Ann and Paul each own 50% of the corporation's stock. Ann's adjusted basis in her XYZ stock is 7,800 and Paul's adjusted basis in his stock is $4,300. During the year 2019, XYZ makes the following cash distributions split equally between Ann and Paul: April 30 October 31 $15,000 $10,000 What is the amount, character and source of each section 301 distribution to Ann and Paul under each of the following assumptions? (a) Accumulated Earnings and Profits as of 1/1/19 of $-0-. Current Earnings and Profits for 2019 of $16,000 all of which is attributable to the period May 1 through December 31. (b) Accumulated Earnings and Profits as of 1/1/19 of $12,000. Current Earnings and Profits for 2019 of $8,000. (c) Accumulated Earnings and Profits as of 1/1/19 of negative $15,000. Current Earnings and Profits for 2019 of $22,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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