South-western Federal Taxation 2018: Individual Income Taxes
41st Edition
ISBN: 9781337385886
Author: William H. Hoffman, James C. Young, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 20, Problem 52P
a.
To determine
State the tax consequences of the distribution to Person L.
b.
To determine
State the tax consequences of the distribution to Corporation C.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Lily is the sole shareholder of Crimson Corporation (a C corporation). At a time when Crimson has a deficit in accumulated E & P of $90,000 and current E & P of $65,000, it distributes a cash dividend of $85,000. If Lily’s basis in her stock is $15,000, what are the tax consequences of the distribution to: a. Lily? b. Crimson Corporation?
Tall Corporation (an S-corporation) has
AAA of $16,000 and AEP of $8,000 .Tall
Corp. distributes $20,000 of cash to its
Henry, the sole shareholder. Henry's basis
in his S Corp stock before the distribution
is $40,000. Henry is in the 37% tax
bracket.
1. What are the tax consequences to
Henry as a result of this distribution?
2. What is ending balance in AAA and
AEP. What is Henry's ending stock basis?
3
Chapter 20 Solutions
South-western Federal Taxation 2018: 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 - Prob. 6DQCh. 20 - LO.3, 4, 5 Contrast the income taxation of...Ch. 20 - LO.3, 8, 9 The taxpayer has generated excess...Ch. 20 - Prob. 9DQCh. 20 - Prob. 10DQ
Ch. 20 - Prob. 11DQCh. 20 - Prob. 12DQCh. 20 - Prob. 13DQCh. 20 - Prob. 14DQCh. 20 - Prob. 15DQCh. 20 - Prob. 16DQCh. 20 - Prob. 17DQCh. 20 - Prob. 18DQCh. 20 - Prob. 19DQCh. 20 - Prob. 20DQCh. 20 - Prob. 21DQCh. 20 - Prob. 22DQCh. 20 - Prob. 23DQCh. 20 - Blaine, Cassie, and Kirstin are equal partners in...Ch. 20 - Prob. 25DQCh. 20 - LO.3 Green Corporation, a calendar year taxpayer,...Ch. 20 - Prob. 27CECh. 20 - Banana Corporation is a May 31 fiscal year...Ch. 20 - LO.4 Gold and Silver are two unrelated calendar...Ch. 20 - Maroon Corporation is a calendar year taxpayer....Ch. 20 - Prob. 32CECh. 20 - Prob. 33CECh. 20 - Prob. 34CECh. 20 - Drab Corporation, a calendar year S corporation,...Ch. 20 - Kim is a 40% shareholder in Taupe Corporation, a...Ch. 20 - Prob. 37CECh. 20 - LO.3, 4, 5 Using the legend provided below,...Ch. 20 - LO.3 Garnet has the following capital asset...Ch. 20 - LO.3, 8 Citron, a calendar year taxpayer, began...Ch. 20 - LO.3 Taupe, a calendar year taxpayer, has a...Ch. 20 - LO.3, 8 Robin had the following capital...Ch. 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 - Prob. 51PCh. 20 - Prob. 52PCh. 20 - Prob. 53PCh. 20 - Prob. 54PCh. 20 - During the current year, Thrasher (a calendar...Ch. 20 - Prob. 56PCh. 20 - Jim Olsen owns all of the stock in Drake, a...Ch. 20 - Prob. 58PCh. 20 - Prob. 59PCh. 20 - LO.9 The Pheasant Partnership reported the...Ch. 20 - Prob. 61PCh. 20 - Prob. 62PCh. 20 - Prob. 63PCh. 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
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 8. A, an individual, owns all 100 shares of X Co. A's basis in these shares is $1 per share ($100 total). 8a) A transfers 10 shares to X in exchange for cash of 10. How will this transaction be treated for tax purposes?arrow_forward4. Marty Byrde is the sole owner of Ozark Co. During the tax year he received both distributions and dividends from the company. What type of entity is Ozark Co. and how would that be possible?arrow_forwardTeal Corporation, with E & P of$2,000,000, distributes property with a basis of $150,000 and a fair market value of $400,000 to Grace. She owns 15% of the outstanding Teal shares. What are the tax consequences to Teal Corporation and to Grace if the distribution is a nonqualified stock redemption? What are the tax consequences in part (a) if Grace is a corporation? What are the tax consequences to Teal Corporation and to Grace if the distribution is a qualifying stock redemption? Assume that Grace’s basis in the redeemed shares is $90,000. What are the tax consequences in part (c) if Grace is a corporation?arrow_forward
- 1.arrow_forwardJhumel received cash dividends from her investment in the stocks of Jollibee foods Corporation amounting to P15,000 net of final tax. How much final tax was withheld from her dividend income? a. P0 b. P1,500 c. P1,667 d. P3,750 e. Answer not givenarrow_forwardHello, I need help solving this accounting problem.arrow_forward
- Ma1. Carl Carlson, a single taxpayer, owns 100% of Delta Corporation. During 2021, Delta reports $150,000 of taxable income. Carl reports no income other than that earned from Delta, and Carl claims the standard deduction. a) What is Delta's income tax liability assuming Carl withdraws none of the earnings from the C Corporation? What is Carl's income tax liability? What is the total tax liability for the corporation and its shareholders? b) Assume that Delta instead distributes $80,000 of its after-tax earnings to Carl as a dividend in the current year. What is the total income tax liability for the C Corporation and its shareholder? c) How would your answer to Part a change if Carl withdrew $80,000 from the business in salary? Assume the corporation pays $6,120 of Social Security taxes on the salary, which it can deduct from the $150,000 taxable income amount in Part a. Carl also pays $6,120 of Social Security taxes on the salary, which he cannot deduct. d) How would your…arrow_forward1. Corp A wishes to acquire the business of Corp T. Corp T stock is worth $650 million, and its shareholders cumulatively have a tax basis of $300 million in the Corp T shares. Corp T has no debt, very little cash, and assets with a cumulative tax basis of $100 million. Assume the Corp T shareholders don't want to pay tax on their gain. Which transactions are available in the following scenarios? a. Corp A is willing to use only its voting stock to acquire Corp T b. Corp A wants to use its stock to acquire only 80% of Corp T, and pay cash for the rest, and it needs Corp T to continue in existence (due to valuable licenses Corp T holds) c. Corp A wants to acquire the assets of Corp T for itself and have Corp T go out of existence d.Corp A wants one of its subsidiaries to acquire the assets of Corp Tarrow_forwardMs. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president of Xenon. The corporation's financial records show the following: Gross income from sales of goods Operating expenses $1,590,000 (930,000) (300,000) (200,000) Salary paid to Ms. Xie Dividend distributions a. Compute the combined tax cost for Xenon and Ms. Xie. (Ignore payroll tax.) b. How would your computation change if Ms. Xie's salary was $500,000 and Xenon paid no dividends? Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Compute the combined tax cost for Xenon and Ms. Xie. (Ignore payroll tax.) Xenon's tax $ 360,000 X Ms. Xie's tax on salary 111.000✔ Ms. Xie's tax on dividend 40.000 ✓ Total income tax cost 511,000arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
Understanding U.S. Taxes; Author: Bechtel International Center/Stanford University;https://www.youtube.com/watch?v=QFrw0y08Oto;License: Standard Youtube License