Please given answer financial accounting Joe owns 100% of Green Corporation (E & P) of $500,000 and 100% of NavyCorporation (E & P of $400,000). Joe sells 100 shares in Green (basis of $40,000)to Navy for $70,000, its fair market value. Joe purchased the stock in Green sixyears ago. Joe has:a. A long-term capital gain of $30,000b. A long-term capital gain of $70,000c. Dividend income of $30,000d. Dividend income of $70,000e. None of the above

Step 1: Define Dividend incomeDividend income refers to the income received from the company of…

Answered: Joe owns 100% of Green Corporation (E &…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter12: Corporations: Organization, Capital Structure, And Operating Rules

Section: Chapter Questions

Problem 20P

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Similar questions

Jayne purchased General Motors stock 6 years ago for $20,000. In the current year, she sells the stock for $35,000. What is Jayne's gain or loss? $15,000 long-term gain $15,000 short-term gain $15,000 ordinary loss $15,000 extraordinary gain No gain or loss is recognized on this transaction.
Devi is the chief executive officer of Nishida Limited. Devi owns 20 percent of the common stock of Nishida. During the current year, Devis salary is 60,000 and he receives a 30,000 bonus. Nishida has taxable income of 200,000 and pays 80,000 in cash dividends. How much gross income does Devi have if a. Nishida is a corporation? b. Nishida is an S corporation?
Bob purchases 25,000 shares of common stock of Super Duper for $100,000. Exactly one year later when the stock is selling for $5 per share, Bob sells 5,000 shares for $25,000 and holds on to the remaining 20,000 shares. Which of the following statements is correct? Group of answer choices Bob has a realized capital gain of $4,000 and an unrealized capital gain of $1,000. Bob has a realized capital gain of $5,000 and an unrealized capital gain of $20,000. Bob has a $25,000 realized capital gain. Bob has a $5,000 unrealized capital gain.
Bob purchases 25,000 shares of common stock of Super Duper for $100,000. Exactly one year later when the stock is selling for $5 per share, Bob sells 5,000 shares for $25,000 and holds on to the remaining 20,000 shares. Which of the following statements is correct? a.) Bob has a realized capital gain of $4,000 and an unrealized capital gain of $1,000. b.)Bob has a realized capital gain of $5,000 and an unrealized capital gain of $20,000. c.)Bob has a $25,000 realized capital gain. d.)Bob has a $5,000 unrealized capital gain.
Wilson acquires 1500 of the 10000 shares of Star Corp for $900,000. Wilson exerts significant control over Star. Star reports $500,000 of net income in 2022 and paid $5 per share in dividends. What amount of income will Wilson report on this investment?
Hayden owns 100% of the shares of ABC Co. Hayden's spouse owns 100% of the shares of XYZ Co. The shares of ABC Co. are valued at $50,000 with an ACB and PUC of $1000. The couple planning for XYZ Co. to pay Hayden $50,000 in cash for the shares in ABC Co. Which of the following will result from this sale? Multiple Choice Hayden will recognize a capital gain of $49,000. Hayden will recognize a deemed dividend of $50,000 and a capital gain of $0. Hayden will recognize a deemed dividend of $49,000 and a capital gain of $0. Hayden will recognize a capital gain of $50,000.
Diana, the sole shareholder of Charles Corporation stock, owns 1,000 shares, which she purchased 18 years ago. Diana's basis in the stock is $2 million. During the current year, Charles, which had earnings and profits of $5 million, redeemed 900 shares for $4.5 million. What are the amount and the character of Diana's gain? A. $2,700, 000 capital gain. B. $4,500,000 dividend. C. 2, 700, 000 ordinary income. D. 4,500,000 capital gain.
General Accounting
Debbie, the sole shareholder of Ancient Corporation’s only class of stock, owns 1,000 shares, which she purchased 15 years ago. Debbie’s basis in the stock is $1 million. During the current year, Ancient, which had earnings and profits of $2.5 million, redeemed 900 shares for $2,250,000. What are the amount and the character of Debbie’s gain? A. $2,250,000 dividend. B. $2,250,000 capital gain. C. $1,350,000 dividend. D. $1,350,000 capital gain.
1.Adams owns 80% of Williams and has a carrying value of the investment at January 1, 2020 of $600,000. On that date Adams sells half its shares for $250,000. What is the journal entry recorded? 2 Same facts as #1, except Adams sells 20% of its investment for $150,000 reducing its ownership to 60%. What journal entry is recorded by Williams at that date 3. Harry purchases 80% of David by paying $50 a share for 40,000 shares of David. The remaining 10,000 shares of David are worth $40 per share both before and after the acquisition. Assume that 100% of the fair value of net assets acquired (FVNAA) of David at date of acquisition is $2,200,000. Calculate Goodwill How much Goodwill is allocated to the controlling interest and the noncontrolling interest 4.Felix pays $1,000,000 to acquire 80% of Unger, assume there is no control premium. At acquisition date the FVNAA of Unger is $1,100,000. Calculate any Goodwill or Gain on Bargain Purchase that will be recorded in consolidation.…
Jason owns 5,000 shares of stock A that has appreciated $30 per share in the 5 years he has owned it. He also owns 10,000 shares of a stock B that have declined in value by $10 a share in the three years he has held it. To finance a vacation, Jason sold 500 shares of A in year t. What might Jason do to minimize his capital gains tax liability in year t (ignore the ability to deduct some amount of capital losses against ordinary income)?
Missy owns all 100 shares of Sand Corporation stock having a $1.15 million FMV. Her basis in the stock is $450,000. Sand'sE&P balance is $700,000. Peter would like to purchase the stock but wants only the corporation's non-cash assets valued at $850,000. Peter is willing to pay $850,000 for these assets. How would your answer to Part a change (if at all) if Sand first redeems 25 shares of Missy 's stock for $300,000 and then Peter purchases the remaining 75 shares from Missy for $850,000? Missy will recognize of on her sale of 75 sharos of Sand Corporation stock to Peter. She will recognize an additional of Jon the redemption of her remaining shares by Sand.

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