[The following information applies to the questions displayed below. Maple Corporation, a calendar-year corporation, was formed three years ago by its sole shareholder, Jian, who immediately elected S corporation status. On December 31 of the current year, Maple distributed $40,500 cash to Jian. What are the amount and character of gain Jian must recognize on the distribution in each of the following alternative scenarios? Note: Leave no answer blank. Enter zero if applicable. If the answer is "0", select "None". Problem 22-66 Part a (Algo) a. At the time of the distribution, Jian's basis in his Maple Corporation stock was $47,600. Amount Gain b. At the time of the distribution, Jian's basis in his Maple Corporation stock was $13,250. Character Amount Character

[The following information applies to the questions displayed below. Maple Corporation, a calendar-year corporation, was formed three years ago by its sole shareholder, Jian, who immediately elected S corporation status. On December 31 of the current year, Maple distributed $40,500 cash to Jian. What are the amount and character of gain Jian must recognize on the distribution in each of the following alternative scenarios? Note: Leave no answer blank. Enter zero if applicable. If the answer is "0", select "None". Problem 22-66 Part a (Algo) a. At the time of the distribution, Jian's basis in his Maple Corporation stock was $47,600. Amount Gain b. At the time of the distribution, Jian's basis in his Maple Corporation stock was $13,250. Character Amount Character

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Presley Corp., a calendar-year corporation, was formed four years ago by its sole shareholder, Smith, who has always operated it as a C corporation. However, at the beginning of 2020, Smith made a qualifying S election for Presley Corp., effective January 1. Presley Corp. reported $140,000 of C corporation earnings and profits on the effective date of the S election. In 2020 (its first S corporation year), Presley Corp. reported business income of $100,000. Smith’s basis in his Presley Corp. stock at the beginning of 2020 was $30,000. What are the amount and character of gain Smith must recognize on the following distributions scenarios, and what is his basis in his Presley Corp. stock at the end of the year? Smith received a $80,000 distribution from Presley Corp. at the end of the year. Smith received a $260,000 distribution from Presley Corp. at the end of the year. Smith received a $300,000 distribution from Presley Corp. at the end of the year.
Jean Jones, Robert Martin, and Lee Brown decide to form a new business to be operated as a C corporation. All three plan to transfer property to JRL Inc. solely in exchange for newly issued common stock in the corporation. Robert and Lee plan to transfer legal title in their properties to the corporation on December 1, 20X2, at which time they will receive 800 and 700 shares of JRL stock, respectively. Jean Jones will be out of the country through January 20X3, and will wait to transfer title in her assets to JRL Inc. until February 5, 20X3, in exchange for 500 shares of stock. Required What will be the tax consequences of this February 5 exchange if Jean’s business properties have a FMV of $10,000 and a basis of $3,500 on the date she exchanges them for a 25% stock interest in JRL Inc.?
Am. 112.
ABC was formed as a calendar-year S corporation with Alan, Brenda, and Conner as equal shareholders. On May 1, 2020, ABC's S election was terminated after Conner sold his ABC shares (one-third of all shares) to his solely owned C corporation, Conner, Incorporated ABC reported business income for 2020 as follows: (Assume that there are 365 days in the year.) Period Income January 1 through April 30 (120 days) $ 203,285 May 1 through December 31 (245 days) 533,285 January 1 through December 31 $ 736,570 If ABC uses the daily method of allocating income between the S corporation short tax year (January 1–April 30) and the C corporation short tax year (May 1–December 31), how much income will it report on its S corporation short tax year return and its C corporation short tax year return for 2020? Essay Toolbar navigation opens in a dialog
Subject :- Accounting
Eight years ago, SW purchased 1,750 shares of Delta stock. On May 20 of the current year, it sold these shares for $50 per share. Required: In each of the following cases, compute SW's recognized gain or loss on this sale: a. SW's cost basis in the 1,750 shares was $62 per share. It did not purchase any other Delta shares during this year. b. SW's cost basis in the 1,750 shares was $62 per share. It purchased 1,950 shares of Delta on May 1 for $52 per share. c. SW's cost basis in the 1,750 shares was $62 per share. It purchased 1,950 shares of Delta on June 8 for $52 per share. d. SW's cost basis in the 1,750 shares was $41 per share. It purchased 1,950 shares of Delta on June 8 for $52 per share. a. b. C. d. Amount
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! Required information [The following information applies to the questions displayed below.] JDog Corporation owns stock in Oscar Incorporated valued at $2,000,000 at the beginning of the year and $2,200,000 at year-end. JDog received a $10,000 dividend from Oscar Incorporated. What temporary book-tax differences associated with its ownership in Oscar stock will JDog report for the year in the following alternative scenarios (income difference only-ignore the dividends-received deduction)? (Leave no answer blank. Enter zero if applicable.) a. JDog owns 5 percent of the Oscar Incorporated stock. Oscar's income for the year was $500,000. Book-tax difference
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ITA 86(1) is often referred to as an estate freeze. Mrs. X. holds all the outstanding 1,000 common shares of a private corporation with an Adjusted Cost Base (ACB) of $1,000 and the current fair market value (FMV) of the shares is $500,000, Mrs. X would like to freeze the value of her shareholding and pass on the future growth of the corporation to her adult children, Y and Z. To accomplish the ITA 86(1) estate freeze, O A. Mrs. X sells her common shares to Y and Z for $250,000 each. OB. Mrs. X sells her common share to Y and Z for $500 each. O C. Mrs. X exchanges her 1,000 common shares for redeernable preferred shares with a total redemption value of $1,000. D. Mrs. X exchanges her 1,000 common shares for redeemable preferred shares with a total rodemption value of $500,000.
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