Lone Star Company is a calendar-year corporation, and this year Lone Star reported $122,000 in current E&P that accrued evenly throughout the year. At the beginning of the year, Lone Star's accumulated E&P was $14,640. Lone Star declared $36,600 in cash distributions on each of the following dates: April 1, July 1, October 1, and December 31. Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. b. Suppose that Matt owned all Lone Star's shares at the beginning of the year and sold half of the shares to Chris on June 1stJune 1st for $48,800. How much dividend income will Matt recognize this year?
Lone Star Company is a calendar-year corporation, and this year Lone Star reported $122,000 in current E&P that accrued evenly throughout the year. At the beginning of the year, Lone Star's accumulated E&P was $14,640. Lone Star declared $36,600 in cash distributions on each of the following dates: April 1, July 1, October 1, and December 31. Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. b. Suppose that Matt owned all Lone Star's shares at the beginning of the year and sold half of the shares to Chris on June 1stJune 1st for $48,800. How much dividend income will Matt recognize this year?
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 48P
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Question
Lone Star Company is a calendar-year corporation, and this year Lone Star reported $122,000 in current E&P that accrued evenly throughout the year. At the beginning of the year, Lone Star's accumulated E&P was $14,640. Lone Star declared $36,600 in cash distributions on each of the following dates: April 1, July 1, October 1, and December 31.
Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.
b. Suppose that Matt owned all Lone Star's shares at the beginning of the year and sold half of the shares to Chris on June 1stJune 1st for $48,800. How much dividend income will Matt recognize this year?
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