Individual C owns all of the shares of Cee Ltd., a Canadian-controlled private corporation holding investments in marketable securities.Individual D owns all of the shares of Dee Ltd., a Canadian-controlled private corporation. Dee Ltd. purchased all of the shares of CeeLtd. from C for $900,000 cash. The Cee Ltd. shares have a PUC and ACB of $100,000. C and D are sisters. Determine C's taxableincome from the sale of shares to Dee Ltd. The balance in the GRIP account is nil$C

The objective of the question is to calculate the taxable income of individual C from the sale of…

Answered: Individual C owns all of the shares of…

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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(J) Alejandra is a 50% partner in ABC LLC. For the current year, the partnership reported taxable income of $175,00 and it distributed $100,000 to the two partners ($50,000 each) what is the overall tax effect of this transaction? What if ABC LLC was to be taxable as a corporation, what would be the overall tax effect of the this transaction?
Ramon incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adjusted tax bases: Adjusted Tax FMV Basis $ 21,500 54,750 139,000 $ 9,200 47,000 Inventory Building Land 69,000 $ 215,250 $ 125,200 Total The fair market value of the corporation's stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) a. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation? Gain or loss realized
Kraze, Inc., a calendar year domestic corporation, owns 50 percent of the stock of Malik, a calendar year specified foreign corporation. Prior to 2018, Malik has accumulated deferred foreign earnings of $40 million and an aggregate foreign cash position of $5.1 million. Assume Malik paid zero foreign tax on its earnings. a. Calculate Kraze's mandatory inclusion amount for Malik's deferred foreign earnings and its pro rata share of Malik's foreign cash position. b. Calculate Kraze's incremental tax liability on its mandatory inclusion amount. c. Determine Kraze's installment payments of the tax liability on its mandatory inclusion amount. Assume such payments begin in 2017.
Amy and Mitchell share equally in the profits, losses, and capital of the accrual basis AM Products LLC. The LLC does not need to report financial information to any third parties, so capital accounts are determined using tax rules (rather than GAAP). Amy is a managing member of the LLC (treated as a general partner) and is a U.S. person. At the beginning of the current tax year, Amy's capital account has a balance of $692,000, and the LLC has debts of $449,800 payable to unrelated parties. The debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. Assume that all LLC debt is shared equally between the partners. The following information about AM's operations for the current year is obtained from the LLC's records. Operating income* $1,038,000 W-2 wages 200,000 Depreciation expense 300,000 Interest income 10,380 Long-term capital loss 6,920 Long-term capital gain 20,760 Charitable contribution (cash) 10,430 Cash distribution…
Simone transferred 100 percent of her stock in Purple Company to Plum Corporation in a Type A merger. In exchange, she received stock in Plum with a fair market value of $670,000 plus $670,000 in cash. Simone's tax basis in the Purple stock was $220,00O. What amount of gain does Simone recognize in the exchange and what is her basis in the Plum stock she receives? Multiple Choice $1,120,000 gain recognized and a basis in Plum stock of $1,340,000. $1,120,000 gain recognized and a basis in Plum stock of $670,000. $670,000 gain recognized and a basis in Plum stock of $670,000. $670,000 gain recognized and a basis in Plum stock of $220,000.
Jan is the sole shareholder of Jan Ltd. Summer is the sole shareholder of SKY Co. Both of the companies are CCPCs. Jan and Summer will amalgamate their corporations as per Section 87(1) on July 21st, forming JS Ltd. Jan's shares in Jan Ltd. have an ACB of $1,000 and a fair market value of $24,500. Summer's shares in SKY Co. have an ACB of $1,500 and a fair market value of $45,500. Which of the following will apply with respect to the planned amalgamation? Multiple Choice The ACB of Jan's and Summer's shares in JS Ltd. will be $24,500 and $45,500, respectively. JS Ltd.'s first taxation year will commence on July 22nd
Amy and Mitchell share equally (50%) in the profits, losses, and capital of the accrual basis AM Products LLC. The LLC does not need to report financial information to any third parties, so capital accounts are determined using tax rules (rather than GAAP). Amy is a managing member of the LLC (treated as a general partner) and is a U.S. person. At the beginning of the current tax year, Amy's capital account has a balance of $780,000, and the LLC has debts of $507,000 payable to unrelated parties. All debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. The following information about AM's operations for the current year is obtained from the LLC's records. Operating income* $1,170,000 W-2 wages 200,000 Depreciation expense 300,000 Interest income 11,700 Long-term capital loss 7,800 Long-term capital gain 23,400 Charitable contribution (cash) 11,750 Cash distribution to Amy 58,500 Unadjusted basis of partnership property 1,600,000 immediately…
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N Corporation has E&P of $400,000. It distributes land with a fair market value of $180,000 (adjusted basis of $125,000) to its sole shareholder, Rory. The land is subject to a liability of $155,000 that Rory assumes. Rory has what amount for a taxable dividend: A taxable dividend of $15,000 A taxable dividend of $25,000 A taxable dividend of $55,000 A taxable dividend of $180,000 A taxable dividend of $400,000 The distribution of land will not result in a taxable event for Rory
Jakob sold a piece of land he owned to a corporation in which he is the sole shareholder using the provisions of ITA 85(1). The land is capital property, the ACB is $59,600, and it had a FMV of $198,000 at the time of the sale. The elected amount is $59,600. As consideration for the property, he received a promissory note for $30, 100, preferred shares with a FMV of $109,000, and common shares with a FMV of $59,600. Which one of the following is the ACB of the preferred shares (first) and the ACB of the common shares (second)? Round your answers to the nearest cent as needed. O A. $19,071.77 and $10,428.23 O B. Nil and $29,500.00 O C. $109,000.00 and $59,600.00 D. $29,500.00 and Nil
am. 54.

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