Volunteer Corporation reported taxable income of $450,000 from operations this year. The company paid federal income taxes of $94,500 on this taxable income. During the year, the company made a distribution of land to its sole shareholder, Rocky Topp. The land's fair market value was $81,000 and its tax and E&P basis to Volunteer was $65,50O. Rocky assumed a mortgage attached to the land of $16,200. The company had accumulated E&P of $864,000 at the beginning of the year. a. Compute Volunteer's taxable income and federal income tax. Taxable income $ 465,500 Federal income tax

Volunteer Corporation reported taxable income of $450,000 from operations this year. The company paid federal income taxes of $94,500 on this taxable income. During the year, the company made a distribution of land to its sole shareholder, Rocky Topp. The land's fair market value was $81,000 and its tax and E&P basis to Volunteer was $65,50O. Rocky assumed a mortgage attached to the land of $16,200. The company had accumulated E&P of $864,000 at the beginning of the year. a. Compute Volunteer's taxable income and federal income tax. Taxable income $ 465,500 Federal income tax

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 33P

See similar textbooks

Similar questions

Volunteer Corporation reported taxable income of $450,000 from operations this year. The company paid federal income taxes of $94,500 on this taxable income. During the year, the company made a distribution of land to its sole shareholder, Rocky Topp. The land's fair market value was $81,000 and its tax and E&P basis to Volunteer was $65,500. Rocky assumed a mortgage attached to the land of $16,200. The company had accumulated E&P of $864,000 at the beginning of the year. b. Compute Volunteer's current E&P. Current E&P
Volunteer Corporation reported taxable income of $450,000 from operations this year. The company paid federal income taxes of $94,500 on this taxable income. During the year, the company made a distribution of land to its sole shareholder, Rocky Topp. The land's fair market value was $81,000 and its tax and E&P basis to Volunteer was $65,500. Rocky assumed a mortgage attached to the land of $16,200. The company had accumulated E&P of $864,000 at the beginning of the year. d. What amount of dividend income does Rocky report as a result of the distribution? Dividend income
Volunteer Corporation reported taxable income of $450,000 from operations this year. The company paid federal income taxes of $94,500 on this taxable income. During the year, the company made a distribution of land to its sole shareholder, Rocky Topp. The land's fair market value was $81,000 and its tax and E&P basis to Volunteer was $65,500. Rocky assumed a mortgage attached to the land of $16,200. The company had accumulated E&P of $864,000 at the beginning of the year. e. What is Rocky's income tax basis in the land received from Volunteer? Income tax basis
Volunteer Corporation reported taxable income of $475,000 from operations this year. During the year, the company made a distribution of land to its sole shareholder, Rocky Topp. The land’s fair market value was $97,500 and its tax and E&P basis to Volunteer was $33,000. Rocky assumed a mortgage attached to the land of $19,500. The company had accumulated E&P of $860,000 at the beginning of the year. c. Compute Volunteer’s accumulated E&P at the beginning of next year.
Uramilaben
Munabhai
Heliot Company operates its business in State H, which levies a 6 percent sales and use tax. This year, Heliot purchased a $600,000 item of tangible property in State K and paid $18,000 sales tax to the state. It also purchased a $750,000 item of tangible property in State L and paid $48,750 sales tax to the state. Firm H transported both items of property into State H for use in its business. Required: a. Compute the use tax that Heliot owes to State H for the property purchased in State K. b. Compute the use tax that Heliot owes to State H for the property purchased in State L. Complete this question by entering your answers in the tabs below. Required A Required B Compute the use tax that Heliot owes to State H for the property purchased in State K. Amount Pre credit use tax Sales tax paid to State K S Use tax owed to State H Required A Required B >
Heliot Company operates its business in State H, which levies a 6 percent sales and use tax. This year, Heliot purchased a $785,000 item of tangible property in State K and paid $23,550 sales tax to the state. It also purchased a $857,000 item of tangible property in State L and paid $53,991 sales tax to the state. Firm H transported both items of property into State H for use in its business. Required: Compute the use tax that Heliot owes to State H for the property purchased in State K. Compute the use tax that Heliot owes to State H for the property purchased in State L. Compute the use tax that Heliot owes to State H for the property purchased in State K. Pre credit use tax Sales tax paid to State K Use tax owed to State H Amount Compute the use tax that Heliot owes to State H for the property purchased in State L. Pre credit use tax Sales tax paid to State L Use tax owed to State H Amount
Gosling, Inc., a calendar year, accrual basis corporation, reported $756,000 net income after tax on its financial statements prepared in accordance with GAAP. The corporation's financial records reveal the following information: Gosling earned $3,500 on an investment in tax-exempt municipal bonds. Gosling received an advance payment of rent this year for $25,000. This amount was not included in book income. Gosling's depreciation expense per books was $72,000, and its MACRS depreciation deduction was $105,000. Gosling recorded $58,000 of business meals and $27,000 of entertainment expense for book purposes. Gosling's federal income tax expense per books was $220,000. a. Compute Gosling's taxable income and regular tax liability. b. Prepare a Schedule M-1, page 5, Form 1120, reconciling Gosling's book and taxable income.
Shimmer Incorporated is a calendar-year-end, accrual-method corporation. This year, it sells the following long-term assets: Accumulated Depreciation $ 54,000 n/a Sales Price Building Sparkle Corporation stock $ 703,000 138,000 Shimmer does not sell any other assets during the year, and its taxable income before these transactions is $820,000. What are Shimmer's taxable income and tax liability for the year? Asset Description Taxable income Tax liability S Amount 820,000 172.200 Cost $ 657,000 238,000
Pete Corporation has accumulated E & P of $82,000 at the beginning of the year. Its current-year taxable income is $370,000. On December 31, Pete Corporation distributed business property (land: fair market value of $150,000, adjusted basis of $290,000) to Jerry, its sole shareholder. Jerry assumes a $70,000 liability on the property. Included in the determination of Pete Corporation's current taxable income is $16,000 of income recognized from an installment sale in a previous year. In addition, the corporation incurred a Federal income tax liability of $67,200, paid life insurance premiums of $4,500, and received term life insurance proceeds of $150,000 on the death of an officer. a. What is Jerry's gross income from the distribution? b. What is the amount of E & P of Pete Corporation after the distribution of property?
TPW, a calendar year taxpayer, sold land with a $540,000 tax basis for $775,000 in February. The purchaser paid $80,000 cash at closing and gave TPW an interest-bearing note for the $695,000 remaining price. In August, TPW received a $57,550 payment from the purchaser consisting of a $34,750 principal payment and a $22,800 interest payment. Assume that TPW uses the installment sale method of accounting. Required: Compute the difference between TPW’s book and tax income resulting from the installment sale method. Is this difference favorable or unfavorable? Using a 21 percent tax rate, compute PTR’s deferred tax asset or liability (identify which) resulting from the book/tax difference.