Requirement e. How would your answer to Part a change if Jackie instead sells 50 of her Parent shares to Subsidiary for $35,000?Jackie will recognizeof Jackie owns 75 of the 100 outstanding shares of Parent Corporation stock. Parent owns 80 of the 100 outstanding shares of Subsidiary Corporation stock. Jackie sells 25 shares of her Parent stock to Subsidiary for $17,500.Jackie's basis in her Parent shares is $13,500 ($180 per share). At the end of the year of sale, Subsidiary and Parent have E&P of $33,500 and $(1,500), respectively.Read the requirements.Requirement a. What are the amount and character of Jackie's recognized gain or loss on the sale?Jackie will recognizeRequirement b. What is Jackie's basis in her remaining shares of Parent stock?ofJackie's basis in her remaining shares of Parent stock isRequirement c. How does the sale affect the E&P of Parent and Subsidiary?Subsidiary's E&P isParent's E&P isSubsidiary's E&P after the sales isParent's E&P after the sales isRequirement d. What basis does Subsidiary take in the Parent shares it purchases?Subsidiary's basis in the Parent shares is

Calculate the quantity found out. Jackie sells 25 shares of her parent stock to subsidiary for…

Requirement a. What are the amount and character of Jackie's recognized gain or loss on the sale? Jackie will recognize Requirement b. What is Jackie's basis in her remaining shares of Parent stock? Jackie's basis in her remaining shares of Parent stock is Requirement c. How does the sale affect the E&P of Parent and Subsidiary? Subsidiary's E&P is Parent's E&P is Subsidiary's E&P after the sales is Parent's E&P after the sales is Requirement d. What basis does Subsidiary take in the Parent shares it purchases? Subsidiary's basis in the Parent shares is

Requirement a. What are the amount and character of Jackie's recognized gain or loss on the sale? Jackie will recognize Requirement b. What is Jackie's basis in her remaining shares of Parent stock? Jackie's basis in her remaining shares of Parent stock is Requirement c. How does the sale affect the E&P of Parent and Subsidiary? Subsidiary's E&P is Parent's E&P is Subsidiary's E&P after the sales is Parent's E&P after the sales is Requirement d. What basis does Subsidiary take in the Parent shares it purchases? Subsidiary's basis in the Parent shares is

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 57P

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Question

Requirement e. How would your answer to Part a change if Jackie instead sells 50 of her Parent shares to Subsidiary for $35,000?
Jackie will recognize
of

Jackie owns 75 of the 100 outstanding shares of Parent Corporation stock. Parent owns 80 of the 100 outstanding shares of Subsidiary Corporation stock. Jackie sells 25 shares of her Parent stock to Subsidiary for $17,500.
Jackie's basis in her Parent shares is $13,500 ($180 per share). At the end of the year of sale, Subsidiary and Parent have E&P of $33,500 and $(1,500), respectively.
Read the requirements.
Requirement a. What are the amount and character of Jackie's recognized gain or loss on the sale?
Jackie will recognize
Requirement b. What is Jackie's basis in her remaining shares of Parent stock?
of
Jackie's basis in her remaining shares of Parent stock is
Requirement c. How does the sale affect the E&P of Parent and Subsidiary?
Subsidiary's E&P is
Parent's E&P is
Subsidiary's E&P after the sales is
Parent's E&P after the sales is
Requirement d. What basis does Subsidiary take in the Parent shares it purchases?
Subsidiary's basis in the Parent shares is

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Step 1: To calculate Jackie's recognized gain or loss on the sale, we need to compare the amount realized wi

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Step 2: To calculate Jackie's basis in her last stocks of Parent inventory, we need to subtract the shares o

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Step 3: Answer to requirement c

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Step 4: Answer to requirement d

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Step 5: Answer to Requirements e

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