Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 20, Problem 48P
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.
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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?
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 & Pof $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 Lily and Crimson?
a. How is the $85,000 cash dividend taxed to Lily?
Dividend Income
Return of Capital
Capital Gain
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 & Pof $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 Lily and Crimson?
a. How is the $85,000 cash dividend taxed to Lily?
Dividend Income
Return of Capital
Capital Gain
b. What are the tax consequences of the distribution to Crimson Corporation?
After the distribution Crimson Corporation's current E & Pis $___ and its accumulated E & Pis $_ --
deficit
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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