porate earnings and profits (E&P) is correct?
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- If profits are eventually issued as dividends, IAET-subject profits are liable to income tax. False or TrueWhich of the following statements is correct? Earnings and profits are exactly the same as retained earnings. Distributions paid in excess of earnings and profits are taxable to the extent of stockholder basis. Distributions of appreciated property create a gain to the stockholder recipient. A distribution from earnings and profits is a dividendProfits that have been subjected to IAET will be liable to dividend tax when they are eventually declared as dividends. Is it true or false?
- Which of the following statements is incorrect? Earnings and profits are conceptually similar to retained earnings. A distribution from earnings and profits in excess of stockholder basis is a nontaxable return of capital. A distribution of appreciated property creates a gain to the corporation. Distributions paid in excess of earnings and profits are nontaxable to the extent of stockholder basis.Profits that have been subjected to IAET will be liable to dividend tax when they are eventually declared as dividends. True and false statements.Which of the following statements is correct? Multiple Choice Earnings and profits are exactly the same as retained earnings. Distributions of appreciated property create a gain to the stockholder recipient. A distribution from earnings and profits is a dividend. Distributions paid in excess of earnings and profits are taxable to the extent of stockholder basis.
- Which of the following statements regarding constructive dividends is not correct? a. Constructive dividends do not need to be formally declared or designated as a dividend b. Constructive dividends need not be paid pro rata to the shareholders. c. Corporate shareholders that receive constructive dividends may not use the dividends received deduction. d. Constructive dividends are taxable as dividendsWhich of the following statements is true regarding the payment of dividends to preferred shareholders? O a. Payments to debtholders are paid before dividends are paid to preferred shareholders. O b. Dividends to preferred shareholders are a tax-deductible expense to the issuing company. O c. Dividends to preferred shareholders are paid before payments are made to debtholders. O d. Dividends to preferred shareholders are paid after dividends are paid to common shareholders.Profits or losses are recorded in a share capital account. O TRUE O FALSE The main differences between profit reported by a proprietorship and a corporation are income tax expense and salaries paid to owners. O TRUE O FALSE
- The following independent statements may be true or false. Discuss the circumstances whereby the statement is true and the circumstances whereby it is false. (a) A Group will always report a Consolidated Profit after Tax that is larger than the Consolidated Profit after Tax attributable to the Shareholders of the Parent.A corporate distribution is includible in a shareholder’s gross income to the extent that it is a “dividend.” Please set forth the definition of a dividend and discuss the distribution rules as set forth in Code Section 301 with an example. Contrast the Section 301 distribution rules with the redemption rules under Section 302 and provide an example of a redemption under the 50%/80% test of Section 302(b)(2) setting forth the tax consequences to the shareholder of meeting this test and, in the alternative, failing this test.I- Interest paid on preferred stock is deductible from gross income of the paying corporation.II- A capital expenditure usually benefits more than one accounting period and is deductible from gross income in the year it is paid or incurred.* True; true False; true true; false false; false Which of the following is true?* Payments which constitute bribes, kickbacks and others of similar nature which are necessary to realized profits are allowed as deductions from gross income. The taxes which are deductible from gross income include the taxes, interest and penalties incident to tax delinquency. Deductions are amounts allowed by the Tax Code to be deducted from gross income arrive at the income tax liability of a taxpayer. Losses from wagering transactions shall be allowed only up the extent of the gains from such transactions. Which statement is correct?* The compensation income of managerial or supervisory employees is subject to fringe benefit tax. The taxable fringe benefits…