Linda owns 40% of the stock in an S Corporation. Linda's basis in the S Corporation stock on December 31, 2017, was $14,000. The income reported by the S Corporation in 2018 was $80,000. Linda received a distribution of $20,000 during the year. What should be Linda's basis in the S corporation stock on December 31, 2018?
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- On April 5, 2017, Gustavo was granted an NQSO for 200 shares of common stock at 50 per share. On the date of the grant, there was no readily ascertainable fair market value for the option. Gustavo exercised the options on March 31, 2018, when the stock was selling for 60 per share. He sold the shares on December 1, 2019, for 75 per share. a. What amount and type of income, if any, will Gustavo have on the exercise date? b. What amount and type of income, if any, will Gustavo have on the date of the sale?Linda owns 40% of the stock in an S Corporation. Linda's basis in the S Corporation stock on December 31, 2017, was $14,000. The income reported by the S Corporation in 2018 was $80,000. Linda received a distribution of $20,000 during the year. What should be Linda's basis in the S corporation stock on December 31, 2018?Suppose that at the beginning of 2021 Jamaal's basis in his S corporation stock is $1,000 and he has a $10,000 debt basis associated with a $10,000 loan he made to the S corporation. In 2021, Jamaal's share of S corporation income is $4,000, and he received a $7.000 distribution from the S corporation. How much total income does Jamaal report in 2021 from these transactions? Multiple Choice $0 $4,000 $6,000 $7,000 None of the choices are correct.
- ABC Corp. had accumulated earnings and profits as of January 1, 2021 equal to $17,000. For the calendar year ending December 31, 2021 its current earnings and profits were equal to $10,000. On May 31, 2021, ABC Corp. distributed $32,500 to Smith its sole shareholder. On November 30, 2021, ABC Corp. distributed another $17,500 to Smith. Smith had purchased his ABC Corp, stock from Grey on September 15, 2015, paying $19,500 for his shares. a) What is the amount and character of the May 31, 2021 distribution received by Smith? b) What is the amount and character of the November 30, 2021 distribution received by Smith?(1) Carol owns 4,000 shares of the stock of ABC Corporation. In 2019, in exchange for some of her shares, Carol receives a check for $400,000. Her basis in her entire interest in ABC Corp was equal to $1,000,000, and her adjusted basis of the exchanged shares is equal to $250,000. ABC had $1,200,000 of Earnings & Profits as of the end of the 2019 tax year. In 2018, Carol sustained stock market losses equal to $175,000 and has a LTCL carryover to 2019 equal to $172,000. (a) Assuming she has no other items of income or loss in 2019 and does not itemized her deductions, what are the tax consequences to Carol if the redemption of her shares does not qualify for sale or exchange treatment under §302? The tax consequence (b) Assuming she has no other items of income or loss in 2019 and does not itemized her deductions, what are the tax consequences to Carol if the redemption of her shares does qualify for sale or exchange treatment under §302?In February 2019, Sierra paid $4,500 to acquire 150 shares of CGL stock. In December 2021, CGL declared a two-for-one stock split. If there were no subsequent adjustments, what is Sierra's current basis in the stock, and how many shares does she own? $2,250 basis; 150 shares. $2,250 basis; 300 shares. $4,500 basis; 300 shares. $9,000 basis; 150 shares.
- For the last two years, Margaret Lane has Invested in the shares of Garod Inc. Details of her purchases and sales of these shares are as follows: Shares Purchased (Sold) Per Share Value January 2020 Purchase 300 $4.75 July 2020 Purchase 200 5.25 November 2020 Sale (250) 5.40 July 2021 Purchase 400 5.50 December 2021 Sale (150) 4.80 Determine Ms. Lane's taxable capital gains and allowable capital losses for 2020 and 2021.William accounts for its investment in Baker Company under the equity method. William carried the Baker investment at $150,550 and $165,350 at December 31, 2020, and December 31, 2021, respectively. During 2021 Baker recognized $75,100 of net income and paid dividends of $20,350. Assuming that William owned the same percentage of Baker throughout 2021, its percentage ownership must have been: (Round your answer to the nearest whole percent):On December 31, 2018, Mr. Tom London gives shares with an adjusted cost base of $21,500 and a fair market value of $35,200 to his 9 year old son, Patrick London. On February 24, 2019, the shares pay eligible dividends of $2,060 ($2,843 taxable amount) and, on August 31, 2019, Patrick sells the shares for $39,800. Required: What are the tax consequences for Mr. London and Patrick in each of the years 2018 and 2019? If there are no tax consequences for either individual in a given year, you should clearly state this fact in your answer.
- Pearl Inc. owns shares of Martinez Corporation stock. At December 31, 2020, the securities were carried in Pearl’s accounting records at their cost of $821,000, which equals their fair value. On September 21, 2021, when the fair value of the securities was $1,333,000, Pearl declared a property dividend whereby the Martinez securities are to be distributed on October 23, 2021, to stockholders of record on October 8, 2021.Prepare all journal entries necessary on those three dates. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the years: Date Purchased Shares Basis 7/10/2011 430 $ 14,190 4/20/2012 330 12,804 1/29/2013 530 14,098 11/02/2015 280 9,016 If Dahlia sells 890 shares of Microsoft for $47,170 on December 20, 2021, what is her capital gain or loss in each of the following assumptions? a. She uses the FIFO method. Capital gains? b. She uses the specific identification method and she wants to minimize her current-year capital gain. Capital gains?Jared purchased 300 shares of OXG stock on August 2, 2020, for $1,500. In October 2021, OXG issued a 10% stock dividend. Jared now owns 330 shares and his basis is: