A, Inc. has 1,000 shares of common stock outstanding. These shares are owned by M (600 shares) and S (400 shares). A, Inc. has current &accumulated eamings & profits of $15,000,000. A, Inc. faces a marginal tax rate of 21%, All 100 shares owned by S were redeemed. Theredemption price paid was land (FMV-$1.200,.000; cost basis - $500,000) plus cish of $2.300.000/Spaid 57000 for each share of has stock when beacquired it five years ago. M is the mother of S. What are the tax results of the redemption to S?$3.500,000 Dividend$700.000 Long-term Capital GainNo Gain Recognized$3.500,000 Long-term Capital GainUnder a plan of complete liquidation, Key Corporation distributes land (not a dasqualified property) with an adjusted basis of S410,000 and an FMV of$300,000 for all Sharon's stock. Sharon's basis in her 5% interest in the Key stock is s250.000. Find Shuaren's gain or loss and Key Corporation's recognized gainor lossO RecognizedGain/LossRecognized Gain/Loss50$160,000RecognizedGain/Loss$160,000A)Recognized Gain/LossS110,000 lossO RecognizedGain/Loss$50,000Recognized Gain/Loss50RecognizedGain/Loss550,000Recognized Gain/Loss$110,000 loss

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A, Inc. has 1,000 shares of common stock outstanding. These shares are owned by M 600 shares) and S (400 shares). A. Inc. has current & accumulated eamings & profits of $15,000,000. A, Inc. faces a marginal tax cate of 21%, All 400 shares owned by S were redeemed. The redemption price paid was land (EMV-S1.200.000 cost basis- S00000 pha cinh of $2.300.000/Spal for cadsbate of has shock when be aquired it five years ago. Mis the mother of S. What are the tax results of the redemption to S $3.500.000 Dividend $700.000 Long-term Capital Gain No Gain Recognized $3.500,000 Long-term Capital Gain

A, Inc. has 1,000 shares of common stock outstanding. These shares are owned by M 600 shares) and S (400 shares). A. Inc. has current & accumulated eamings & profits of $15,000,000. A, Inc. faces a marginal tax cate of 21%, All 400 shares owned by S were redeemed. The redemption price paid was land (EMV-S1.200.000 cost basis- S00000 pha cinh of $2.300.000/Spal for cadsbate of has shock when be aquired it five years ago. Mis the mother of S. What are the tax results of the redemption to S $3.500.000 Dividend $700.000 Long-term Capital Gain No Gain Recognized $3.500,000 Long-term Capital Gain

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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