4. Puffin Corporation makes a property distribution to its sole shareholder, Bonnie. The property distributed is a car (basis of $30,000; fair market value of $40,000) that is subject to a $6,000 liability which Bonnie assumes. Puffin has no accumulated E & P and $70,000 of current E & P from other sources during the year. How much dividend should Bonnic report? a $4,000 b. $6,000 c. $10,000 d. $36,000 e. None of the above
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- Puffin Corporation makes a property distribution to its sole shareholder, Bonnie. The property distributed is a car (basis of $30,000; fair market value of $40,000) that is subject to a $7,000 liability which Bonnie assumes. Puffin has no accumulated E & P and $70,000 of current E & P from other sources during the year. How much dividend should Bonnie report? a. $4,000b. $33,000c. $10,000d. $34,000e. None of the above Please show work.5. (a) A transfers a contract to perform services to Newco in exchange for 50% of Newco's stock. B transfers a tract of land with a basis of 50 and FMV of 100 in exchange for 50% of Newco's stock. What are the tax consequences to all of the parties? (b) Suppose that in addition to transferring the services contract, A transfers cash of 20. A still receives 50% of the stock. How would this change your answer?Gamma Corporation distributes land to its sole shareholder, Lisa. The land has a basis to the corporation of $20,000 and a fair market value of $50,000. There is a $35,000 mortgage on the land which the shareholder agrees to assume. Before this distribution, Gamma has current E&P of $5,000 and accumulated E&P of $4,000. How much gain does Gamma Corporation recognize as a result of this distribution? How much dividend income does Lisa recognize as a result of this distribution? What is Lisa’s basis for the land? What is Gamma Corporation’s E&P after the distribution?
- 5. (a) A transfers a contract to perform services to Newco in exchange for 50% of Newco's stock. B transfers a tract of land with a basis of 50 and FMV of 100 in exchange for 50% of Newco's stock. What are the tax consequences to all of the parties? (b) Suppose that in addition to transferring the services contract, A transfers cash of 20. A still receives 5096 of the stock. How would this change your answer? () Suppose instead that in addition to transferring the services contract, A transfers cash of just 1 How would this change your answer?Q1. As of the end of the current tax year, Mad Corp. has accumulated E&P of $31,000 and current E&P of $1,000. At the end of the year, Mad Corp. distributes $50,000 to its sole shareholder, Mary, whose stock basis is $10,000 (before the distribution). What amount of the distribution is treated as a dividend? Q2. As of the end of the current tax year, Mad Corp. has accumulated E&P of $31,000 and current E&P of $1,000. At the end of the year, Mad Corp. distributes $50,000 to its sole shareholder, Mary, whose stock basis is $10,000. What is Mary’s stock basis after the distribution?N1. Account 5. PURSUANT TO A COMPLETE LIQUIDATION IN THE CURRENT YEAR Z CORPORATION DISTRIBUTES TO MOE LAND (FMV $390,000, BASIS OF $425,000) THAT WAS PURCHASED SEVEN YEARS AGO AND HELD FOR INVESTMENT. THAT LAND IS SUBJECT TO A MORTGAGE OF $250,000. MOE OWNS 35% OF Z COPORATION AND HAS A BASIS OF $60,000 IN THOSE SHARES. WHAT ARE THE TAX CONSEQUENCES OF THE LIQUIDATING DISTRIBUTION TO Z CORPORATION AND TO MOE?
- Martin Corporation's accumulated E\&P Was($500,000)at the beginning of the year and Martin Corporation reported current E\&P of$200,000this year. Martin distributed$400,000cash to its sole shareholder, Craig, on the last day of the tax year. Craig's basis in his Martin Corporation stock before the distribution is$60,000. 1. How much of the distribution is a dividend to Craig? 2. What is Craig's stock basis in Martin after the distribution? 3. How much of the distribution is a capital gain to Craig? If any of the answers are−0-, do not leave blank. Put−0-Required information [The following information applies to the questions displayed below.] Wasatch Corporation (WC) received a $200,000 dividend from Tager Corporation (TC). WC owns 15 percent of the TC stock. Compute WC's deductible DRD in each of the following situations: b. WC's taxable income (loss) without the dividend income or the DRD is $(10,000). Deductible DRD1. Blue Corporation distributes land and building having a $70,000 adjusted basis and a $200,000 FMV to its sole shareholder, Marina. Blue has current and accumulated E&P exceeding $200,000. The property is subject to a $120,000 mortgage, which Marina assumes. What is the amount of the taxable dividend received by Marina? Group of answer choices $80,000 $70,000 $0 $130,000
- Oreo Corporation has AEP of $5,000 and negative CEP of $18,000. The corporation distributes $11,000 on March 1 to Morris, its sole shareholder, who has a $9,000 basis for his stock which he has held for 6 years. The treatment of the distribution will be Select one: a. $2,000 dividend and a $9,000 capital gain. b. $500 dividend, $9,000 tax free return of stock basis and $1,500 long-term capital gain. c. $2,000 dividend and a $9,000 tax free return of basis. d. $8,000 dividend and a $3,000 return of capital. e. None of the above.The Berry Corporation owns a building with a basis of $40,000 that is subject to a debt of $ 160,000. The FMV of the building is $100,000. Berry distributes the property in a nonliquidating distribution (along with the debt) to Delia, its sole shareholder. What is the amount of the distribution to Delia? a. $80,000. b. $50,000. c. zero. d. $30,000. e. none of the above.Global Corporation distributed property with an $850,000 fair market value and a $415,000 adjusted basis to one of its shareholders. The property was subject to a $230,000 mortgage, which the shareholder assumed. Global has ample E & P to cover any distribution made during the year. What is the amount of the shareholder’s dividend income on the distribution? What is the shareholder’s basis in the property received? For the shareholder: What is the amount of the distribution? What is the basis of the property in the shareholder's hands? For the corporation: Is a gain or loss recognized as a result of the distribution? What is the effect of the distribution on E & P?