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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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.
Frank has 200 shares of XYZ, Inc. with a basis of $5,000 and a value of 7,500. He receives a tax-free stock dividend of 50 additional shares, worth $2,500. (a) After the stock dividend, what is his per share basis in the stock? In other words, if he sells 1 share of stock, what is the basis in that share for determining the gain on the sale of the share? (b) Suppose it was a tax-free dividend, but the 50 new shares were of preferred stock – what would his basis be in common stock and in the preferred stock?
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?
Jack owns 100 shares of Bronco Corporation stock. Jack’s basis in his shares is $50,000 and Bronco’s E&P is $100,000. Bronco redeems 25 shares of Jack’s stock for $85,000. What is the consequence of his transaction. a. Jack’s basis is reduced by $30,000 b. Jack receives $85,000 dividend c. Bronco’s E&P remains at $100,000
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.
Bobert transfers a rental office building (current fair market value of $45,000) that he purchased 20 years ago for $60,000. Its current basis is $15,000 after recognition of $45,000 in depreciation expense.The corporation assumes the $20,000 balance on the original mortgage and Bobert receives 25 shares of stock from the corporation in the exchange. How much gain does Bobert recognize? Show work
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.
Please answer the following question: Facts: Matthew sold 200 shares of Xerox stock on December 23, Year 1. The stock had a basis of $4,000 and was sold for $2,000, resulting in a $2,000 loss realized. On January 10 of Year 2, Matthew caused his IRA to purchase 400 shares of Xerox stock for $4,000. Issue: Assuming there are available capital gains, may Matthew deduct the $2,000 capital loss on the sale of his Xerox stock on his Year 1 tax return? 1) Give a simple, nontechnical 1 sentence answer to the question posed. 2) What is (are) the Code section(s) at issue? 3) Are any Treasury Regulations relevant? 4) List the case/ruling authority on which you relied to arrive at your answer (please provide the name of any case, not just a citation). 5) Provide a step-by-step description of how you arrived at your answer and located the primary sources that you used to support it (include a discussion of the case law or Ruling authority on which you relied)
In the current year, Dan, Jay, and Erin form Zeus Corporation. Dan contributes land (a capital asset) having a $75,000 FMV (fair market value) in exchange for 85 shares of Zeus stock. He purchased the land three years ago for $100,000. Jay contributes machinery (Sec. 1231 property purchased four years ago) having a $115,000 adjusted basis and a $45,000 FMV in exchange for 75 shares of Zeus stock. Erin contributes services worth $30,000 in exchange for 10 shares of Zeus stock. A. What is the amount of Dan's recognized gain or loss? b.What is Dan's basis in his Zeus shares? When does his holding period begin? c.What is the amount of Jay's recognized gain or loss? d. What is Jay's basis in his Zeus shares? When does his holding period begin? e.How much income, if any, does Erin recognize? f.What is Erin's basis in her Zeus shares? When does her holding period begin? g. What is Zeus's basis in the land and the machinery? When does its holding period begin? How…

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