Individual A owns shares of a Canadian-controlled private corporation. All of the corporation's past income has been eligible for the small business deduction. The shares are valued at $200,000 and have an ACB and PUC of $120,000. In 2020, The corporation redeems the shares and A receives $200,000. What amount is included in A's taxable income?

Individual A owns shares of a Canadian-controlled private corporation. All of the corporation's past income has been eligible for the small business deduction. The shares are valued at $200,000 and have an ACB and PUC of $120,000. In 2020, The corporation redeems the shares and A receives $200,000. What amount is included in A's taxable income?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A non-resident alien who is single, died leaving the following properties and deductions : Tangible personal property - P 1,500,000 Shares of stocks, domestic corporation - P 700,000 Shares of stocks, foreign corporation - P 400,000 Deductible expenses - P 800,000 What is the amount of total gross estate ? Choices: 1,400,000 2,200,000 2,600,000 1,800,000
Mr Generous is a South African resident and contacted you as his tax practitioner to assist him in completing his taxable income calculation for the 2023 year of assessment. Mr Generous calculated his taxable income as R950 000 in respect of the 2023 year of assessment, excluding the following transactions: On 31 December 2022, he donated R100 000 to the SPCA, a registered public benefit organisation. The SPCA issued him with a valid section 18A receipt. He also donated R10 000 to his church, which is not registered as a public benefit organisation, on 23 March 2023. On 4 January 2023, he bought his wife a new car worth R 200 000 for her birthday. Calculate Mr Generous' S18A deduction for the 2022 year of assessment.
Jackson, an individual, is a shareholder in Cadduceus Corp., a C corporation with $40,000 in accumulated earnings and profits. Cadduceus Corp. redeems some of its stock from Jackson for $200,000 as part of a qualifying partial liquidation. Jackson's adjusted basis in the stock at the time of redemption was $50,000. For tax purposes, how will Jackson report the effects of this redemption of stock? As a $40,000 dividend only. As a $150,000 capital gain. As a $40,000 dividend and $110,000 capital gain. As a $10,000 capital loss.
Chip has an accrual - method, calendar - year sole proprietorship. On January 1, 2019, he creates accrual - method, calendar - year corporation and transfers to corporation, in exchange for all of corporation's stock(1 class), a single asset as follows: Asset (depreciable personality): Original Cost $100,000 Adjusted Basis $ 30,000 Value $250,000 Holding period = 7 years Determine the tax consequence to: 1. Chip 2. Corporation
Thad, a single taxpayer, has taxable income before the QBI deduction of $198,500. Thad, a CPA, operates an accounting practice as a single member LLC (which he reports as a sole proprietorship). During 2022, his proprietorship generates qualified business income of $158,800, W-2 wages of $119, 100, and $9,600 of qualified property. Assume the QBI amount is net of the self-employment tax deduction. If required, round any division to two decimal places and use that rounded amount in any future computations. Round your final answer to the nearest dollar. What is Thad's qualified business income deduction? 13,689 X $
Thad, a single taxpayer, has taxable income before the QBI deduction of $189,500. Thad, a CPA, operates an accounting practice as a single member LLC (which he reports as a sole proprietorship). During 2021, his proprietorship generates qualified business income of $151,600, W–2 wages of $113,700, and $12,000 of qualified property. Assume the QBI amount is net of the self-employment tax deduction. If required, round any division to two decimal places and use that rounded amount in any future computations. Round your final answer to the nearest dollar. What is Thad's qualified business income deduction?
John is the sole shareholder of Maggy Corporation, a qualified S corporation. At January 1, Year 1, John has a basis in Maggy Corporation of $2000. The corporation’s Year 1 tax return shows the following:Ordinary income $10,000Interest income $1,000Nondeductible expenses $2,000Real estate rental loss $5,000179 deduction $1,500Distribution to John $3,000 What is John’s basis in Maggy Corporation at the end of year 1?
Thad, a single taxpayer, has taxable income before the QBI deduction of $191,000. Thad, a CPA, operates an accounting practice as a single member LLC (which he reports as a sole proprietorship). During 2022, his proprietorship generates qualified business income of $152,800, W–2 wages of $114,600, and $9,200 of qualified property. Assume the QBI amount is net of the self-employment tax deduction. If required, round any division to two decimal places and use that rounded amount in any future computations. Round your final answer to the nearest dollar. What is Thad's qualified business income deduction?
This year, Faro, Incorporated, a calendar year taxpayer, issued 500 shares of its publicly traded stock as a bonus to its employee, Darius. On the date of issuance, the stock's fair market value was $17,600. Required: a. What are the tax consequences to Darius and Faro if Darius's ownership of the stock was fully vested on the date of issuance (the stock was transferable and not subject to risk of forfeiture). b. What are the tax consequences to Darius and Faro if the terms of the bonus require that Darius must hold the stock five years from the date of issuance. If employment is terminated before that date, the stock must be forfeited back to Faro. Darius made no election with respect to the restricted stock. Complete this question by entering your answers in the tabs below. Required A Required B ces What are the tax consequences to Darius and Faro if Darius's ownership of the stock was fully vested on the date of issuance (the stock was transferable and not subject to risk of…
Thad, a single taxpayer, has taxable income before the QBI deduction of $189,500. Thad, a CPA, operates an accounting practice as a single member LLC (which he reports as a sole proprietorship). During 2022, his proprietorship generates qualified business income of $151,600, W-2 wages of $113,700, and $9,200 of qualified property. Assume the QBI amount is net of the self-employment tax deduction. If required, round any division to two decimal places and use that rounded amount in any future computations. Round your final answer to the nearest dollar. What is Thad's qualified business income deduction? X Feedback Check My Work There are three limitations on the QBI deduction: an overall limitation (based on modified taxable income), another that applies to high-income i taxpayers, and a third that applies to certain types of services businesses. The second and third limitations only apply when taxable income before the QBI deduction exceeds $340,100 (married taxpayers filing a joint…
Jackson is the sole owner of JJJ Corporation (an S corporation). At the beginning of 2022, Jackson's basis in his JJJ stock was $8,000. For 2022, JJJ reported a ($30,000) ordinary business loss (not a passive loss) and $4,000 of long-term capital gains. Assuming Jackson's tax basis and his at-risk amount are the same, what is Jackson's stock basis at the end of the year and how much of the ordinary business loss is he allowed to deduct in 2022?
Thad, a single taxpayer, has taxable income before the QBI deduction of $198, 500. Thad, a CPA, operates an accounting practice as a single member LLC (which he reports as a sole proprietorship). During 2022, his proprietorship generates qualified business income of $ 158,800, W-2 wages of $119, 100, and $9, 200 of qualified property. Assume the QBI amount is net of the self-employment tax deduction. If required, round any division to two decimal places and use that rounded amount in any future computations. Round your final answer to the nearest dollar. What is Thad's qualified business income deduction?