Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 20, Problem 50P
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Prepare a letter by explaining the tax plan and its tax consequences.
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At the beginning of the current year, Brou Inc. sells all of its assets and pays its liabilities. Afterwards, the company has $350,000 in cash which is distributed to the sole shareholder, Mr.Daniel. Mr. Daniel purchased the shares from the former shareholder for $50,000. The Paid up capital of the shares is $10,000. The balance in the capital dividend account is $65,000, and the company makesall appropriate elections with respect to this balance. What is the amount of the deemed dividend to Mr. Daniel?A) $ 300,000. B) $ 340,000. C) $ 275,000. D) $ 65,000.
[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.
Ees
Amount
Gain
b. At the time of the distribution, Jian's basis in his Maple Corporation stock was $13,250.
Character
Amount
Character
Please answer the following question:
Facts: Matthew sold 200 shares of Xerox stock on December 23, Year 1. The stock had a basis of $4,000 and was sold for $2,000, resulting in a $2,000 loss realized. On January 10 of Year 2, Matthew caused his IRA to purchase 400 shares of Xerox stock for $4,000.
Issue: Assuming there are available capital gains, may Matthew deduct the $2,000 capital loss on the sale of his Xerox stock on his Year 1 tax return?
1) Give a simple, nontechnical 1 sentence answer to the question posed.
2) What is (are) the Code section(s) at issue?
3) Are any Treasury Regulations relevant?
4) List the case/ruling authority on which you relied to arrive at your answer (please provide the name of any case, not just a citation).
5) Provide a step-by-step description of how you arrived at your answer and located the primary sources that you used to support it (include a discussion of the case law or Ruling authority on which you relied)
Chapter 20 Solutions
Individual Income Taxes
Ch. 20 - Prob. 1DQCh. 20 - LO.1 Sylvia and Trang want to enter into business...Ch. 20 - Prob. 3DQCh. 20 - Prob. 4DQCh. 20 - Prob. 5DQCh. 20 - LO.3, 4, 5 Contrast the income taxation of...Ch. 20 - LO.3, 8, 9 The taxpayer has generated excess...Ch. 20 - Prob. 8DQCh. 20 - Prob. 9DQCh. 20 - Prob. 10DQ
Ch. 20 - Prob. 11DQCh. 20 - Prob. 12DQCh. 20 - Prob. 13DQCh. 20 - Prob. 14DQCh. 20 - LO.5 Beige Corporation has a fiscal year ending...Ch. 20 - Prob. 16DQCh. 20 - Prob. 17DQCh. 20 - Prob. 18DQCh. 20 - Prob. 19DQCh. 20 - Prob. 20DQCh. 20 - Prob. 21DQCh. 20 - Blaine, Cassie, and Kirstin are equal partners in...Ch. 20 - LO.3 Green Corporation, a calendar year taxpayer,...Ch. 20 - Prob. 24CECh. 20 - Prob. 25CECh. 20 - LO.4 Gold and Silver are two unrelated calendar...Ch. 20 - Prob. 27CECh. 20 - Prob. 28CECh. 20 - Prob. 29CECh. 20 - Prob. 30CECh. 20 - Prob. 31CECh. 20 - Prob. 32CECh. 20 - Prob. 33CECh. 20 - LO.3, 4, 5 Using the legend provided below,...Ch. 20 - LO.3 Garnet incurs the following capital asset...Ch. 20 - Prob. 36PCh. 20 - LO.3 Taupe, a calendar year taxpayer, has a...Ch. 20 - LO.3, 8 Robin incurred the following capital...Ch. 20 - Prob. 39PCh. 20 - Prob. 40PCh. 20 - Prob. 41PCh. 20 - Prob. 42PCh. 20 - Prob. 43PCh. 20 - Prob. 44PCh. 20 - Prob. 45PCh. 20 - Prob. 46PCh. 20 - Prob. 47PCh. 20 - Prob. 48PCh. 20 - Prob. 49PCh. 20 - Prob. 50PCh. 20 - During the current year, Thrasher (a calendar...Ch. 20 - Prob. 52PCh. 20 - Prob. 53PCh. 20 - Prob. 54PCh. 20 - Prob. 55PCh. 20 - LO.9 The Pheasant Partnership reported the...Ch. 20 - Prob. 57PCh. 20 - Prob. 58PCh. 20 - Prob. 59PCh. 20 - Prob. 1RPCh. 20 - Prob. 2RPCh. 20 - Prob. 3RPCh. 20 - Prob. 5RPCh. 20 - On January 1, year 5, Olinto Corp., an accrual...Ch. 20 - Prob. 2CPACh. 20 - Prob. 3CPACh. 20 - Prob. 4CPACh. 20 - Prob. 5CPACh. 20 - Prob. 6CPACh. 20 - Prob. 7CPA
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