26. Craig received a $25,000 distribution from Yellow Corporation that the corporation identified as $15,000 dividend and $10,000 return of capital. Whateffect does this distribution have on Craig's taxable income if his basis in the stock of Yellow is $8,000? a. Increase of $25,000 b. Increase of $17,000 c.Increase of $15,000 d. Increase of $10,000

Dividend is the distribution of company’s income within its shareholders.

Answered: 26. Craig received a $25,000…

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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3.
Company Z has $105,000 of taxable income from its operations, $7,000 of interest income, and $24,000 of dividend income from preferred stock it holds in other corporations. Its corporate tax r is 25%. What is Company Z's tax liability? Assume a 50% dividend exclusion for taxes on dividends. Oa. $26,250 O b. $31,000 c. $34,000 d. $32,250 e. $28,000
Please provide correct answer
Determine the basis of stock in the hands of the shareholder, the basis to the corporation of the contributed property, and the gain, if any, to the shareholder in each of the follow independent cases. In all cases, assume that the 80% test is met. a. Pierre contributes a vehicle with a FMV of $ 6,000.00 and basis of $ 8,000.00. b. Marcus contributes land with a FMV of $ 500,000.00, basis of $ 300,000.00, and debt of $ 250,000.00. c. Same as b. Except Marcus also receives cash of $ 25,000.00. d. Patricia contributes an apartment building with a FMV of $ 200,000, basis of $ 50,000.00, and debt of $ 125,000.00
The question is in the image attached.
Ian holds 100 shares in Big Bank Pty Ltd. The company paid a partially franked dividend of $4 per share (franked to 30%) on 1 June. Assume a corporate tax rate of 30%. How much tax (if any) must Ian pay on the dividend income? Assume his applicable marginal tax rate is 45% and this is the only transaction. a. $160 b. Nil c. $151 d. $57
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
Ht.15.
Financial information for a company for 2013 is provided. The company has a December 31 year- end. Increase in accounts receivable 800 Decrease in prepaid expenses 1400 Decrease in accounts payable 2100 Purchase of new recording equipment 5000 Dividend declared 1550 Cash from sale of building 500 Issued shares to the public 1200 Purchased 10% of Beats 1000 Repaid bank loan 2200 Increased unearned revenue 4000 Short-term line-of-credit (fluctuates positive or negative) -4000 Revenues 150,000 Cost of Goods Sold 90,000 SG&A 35,000 Amortization expense (intangibles) 8,000 Depreciation expense (PP&E) 6,000 Gain on sale of building 500 Net income 11,500 1.) Prepare the Income Statement for 2013 and prepare the entire Cash Flow Statement for 2013 using the indirect method for the operating activities section. Assume a beginning cash balance of $25,000.
am.105.
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)
8. A, an individual, owns all 100 shares of X Co. A's basis in these shares is $1 per share ($100 total). 8a) A transfers 10 shares to X in exchange for cash of 10. How will this transaction be treated for tax purposes?

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