Non-Taxable Exchanges

Question 11. Moss exchanges a warehouse for a building he will use as an office building. The adjusted basis of the warehouse is $600,000 and the fair market value of the office building is $350,000. In addition, Moss receives cash of $150,000. What is the recognized gain or loss and the basis of the office building? Question ...continues

NonLiquidating Distributions

1. Describe the mechanics of a stock redemption. (5 points) 2. A stock redemption may be viewed either as a distribution or as a sale/exchange. From a tax perspective, which view is more advantageous for the shareholder and why? (5 points) 3. List the four circumstances when a redemption is tax-advantaged. (5 points) 4. W ...continues

Non-Liquidating Distributions

1)Shareholder who owns 35000 shares out of 50000 shares outstanding. How many shares must this shareholder redeem to satisfy section 302(6)(2)? Is reducing shareholder's interest from 70% to 50% enough? 2) Stock of ABC Corp. Is own as follows: -250 shares Mr Smith -200 shares Mrs Smith (Spouse of Mr Smith) -50 ...continues

Newt is an S corporation: Calculate any penalty tax under Section 1375

At the end of 2008, Newt, an S corporation, has gross receipts of $190,000 and gross income of $170,000. Newt has AEP of $22,000 and taxable income of $30,000. There is passive investment income of $100,000, with $40,000 of expenses directly related to the production of passive investment income. Newts PII (section 1375) pena ...continues

Prairie Dirt Delight is an S corporation: allocation of operating loss in year of sale

On January 1, Bobby and Alice own equally all of the stock of an electing S corporation called Prairie Dirt Delight. The dirt company has a $60,000 loss for a non-leap year. On the 219th day of the year, Bobby sells his one-half of the stock to his son, Paul. How much of the $60,000 loss, if any, is allocated to Bobby? -$0 ...continues

Boles Corp is an S corporation: what is the amount of separately stated income

Boles Corp. an accrual-basis, calendar year S corporation, has been an S corporation since its inception and is not subject to the uniform capitalization rules. Gross Receipts $50,000 Dividend Income $5,000 From investments Supplies expense $2,000 Utilities Expense $1,500 On Bole’s 2006 S corporation Form 1120-S Sch ...continues

S corporations 6

Which one of the following statements concerning the eligibility requirements for S corporations is NOT correct? -An S corporation is permitted to own 75% of the stock of another S corporation -An S corporaation is permitted to be a partner in a partnership -An S corporation is permitted to own 100% of the stcok of a C corpor ...continues

What is a triangular acquisitive reorganization?

What is a triangular acquisitive reorganization?

S Corporation

Peter Sam owns 60% of a calendar year S corporation during 2007. His stock basis on December 31, 2006 is $17,000, and his debt basis is $2,000. If the S corporation incurs a $48,000 loss for 2007, what amount may Peter Sam deduct on his individual tax return?

Tax Problem: Barney and Jones loss for 2008. How much can Barney deduct?

The partnership of Barney and Jones realized an ordinary loss of $42,000 in 2008. Both the partnership and the two partners are on a calendar-year basis. The partners materially participate in the partnership's activities and share profits and losses equally. At December 31, 2008, Barney had an adjusted basis of $18,000 for his ...continues