PRINCIPLES OF TAXATION F/BUS.+INVEST.
22nd Edition
ISBN: 9781259917097
Author: Jones
Publisher: MCG
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Chapter 11, Problem 3RP
To determine
State whether the dividend on the distribution of tract D6 would be taxable to Company E. Calculate the dividend income that Company B and L would recognize. Calculate the tax basis of Company B and L in track D6.
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Castle Construction, Inc. is a real estate development company organized as an S corporation. The company's sole shareholder, Celia, has a tax basis in her Castle stock of $100,000. This year, the company reported a net operating loss of ($129,000). It also decided to distribute a parcel of land with a tax basis (to Castle) of $65,000 and a fair market value of $185,000. Prior to the distribution, Castle was holding the land as inventory. It decided to distribute the land to Celia because it no longer planned to develop that particular property.
1. Will Celia recognize any gain in connection with the receipt of the distribution? See Treasury Regs. §1.1367-1(f).
2. What will be her tax basis in the land?
3. What will be her remaining tax basis in her stock after accounting for the distribution?
4. How would your answers change if the land had been encumbered by a $75,000 liability, for which Celia assumed personal responsibility upon receipt of the distribution?
Lark City (a government entity) donates land that has a FMV of $800,000 and cash of $100,000 to Orange Corporation as an inducement to locate in the city. Four months later, Orange purchases additional land and a building at a cost of $500,000 and moves its operations to Lark City. Ann, the sole shareholder, contributes equipment (basis of $70,000 and fair market value of $200,000) to help Orange in its new operations in Lark City.
What are the amounts to Orange Corporation?
1. gain recognized, if any;
2. basis in land contributed by Lark City;
3. basis in land/building purchased), and
4. tax consequences of the contribution from Ann to Orange Corporation?
Silo, Incorporated sold investment land to PPR, Incorporated for $110,000 cash. Silo's basis in the land was $145,000. Mr. and Mrs.
Jersey own 100 percent of the stock of both corporations.
Required:
a. What is PPR's tax basis in the land purchased from Silo?
b. PPR holds the land as an investment for seven years before selling it to an unrelated buyer. Compute the gain or loss recognized if
the amount realized on sale is: (1) $100,000, (2) $116,000, or (3) $150,000.
Complete this question by entering your answers in the tabs below.
Required A Required B
PPR holds the land as an investment for seven years before selling it totan unrelated buyer. Compute the gain or loss
recognized if the amount realized on sale is: (1) $100,000, (2) $116,000, or (3) $150,000.
Note: Enter a loss with a minus sign.
(1) $100,000
(2) $116,000
(3) $150,000
Recognized
Gain or Loss
$
$
0
5,000
Chapter 11 Solutions
PRINCIPLES OF TAXATION F/BUS.+INVEST.
Ch. 11 - Prob. 1QPDCh. 11 - Prob. 2QPDCh. 11 - Prob. 3QPDCh. 11 - Prob. 4QPDCh. 11 - Prob. 5QPDCh. 11 - Libretto Corporation owns a national chain of...Ch. 11 - Prob. 7QPDCh. 11 - Prob. 8QPDCh. 11 - Prob. 9QPDCh. 11 - In your own words, explain the conclusion that...
Ch. 11 - Prob. 1APCh. 11 - Prob. 2APCh. 11 - Corporation P owns 93 percent of the outstanding...Ch. 11 - This year, Napa Corporation received the following...Ch. 11 - This year, GHJ Inc. received the following...Ch. 11 - In its first year, Camco Inc. generated a 92,000...Ch. 11 - Prob. 7APCh. 11 - Prob. 8APCh. 11 - Cranberry Corporation has 3,240,000 of current...Ch. 11 - Hallick Inc. has a fiscal year ending June 30....Ch. 11 - Landover Corporation is looking for a larger...Ch. 11 - Prob. 12APCh. 11 - Prob. 13APCh. 11 - Prob. 14APCh. 11 - Prob. 15APCh. 11 - Prob. 16APCh. 11 - In each of the following cases, compute the...Ch. 11 - Prob. 18APCh. 11 - Prob. 19APCh. 11 - Jackson Corporation has accumulated minimum tax...Ch. 11 - Prob. 21APCh. 11 - Callen Inc. has accumulated minimum tax credits of...Ch. 11 - Prob. 23APCh. 11 - Prob. 24APCh. 11 - Prob. 25APCh. 11 - James, who is in the 35 percent marginal tax...Ch. 11 - Leona, whose marginal tax rate on ordinary income...Ch. 11 - Prob. 28APCh. 11 - Prob. 29APCh. 11 - Prob. 30APCh. 11 - Prob. 1IRPCh. 11 - Prob. 2IRPCh. 11 - Prob. 3IRPCh. 11 - Prob. 4IRPCh. 11 - Prob. 5IRPCh. 11 - Prob. 6IRPCh. 11 - Prob. 7IRPCh. 11 - Prob. 8IRPCh. 11 - Prob. 1RPCh. 11 - Prob. 2RPCh. 11 - Prob. 3RPCh. 11 - This year, Prewer Inc. received a 160,000 dividend...Ch. 11 - Prob. 1TPCCh. 11 - Prob. 2TPC
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