Question
In: Finance
Ashley, the sole shareholder of Hawk Corporation, has a stock basis of $400,000 at the beginning...
Ashley, the sole shareholder of Hawk Corporation, has a stock basis of $400,000 at the beginning of the year. On July 1, she sells all of her stock for $2 million to Matt (1 million) and Brody (1 million) . On January 1, Hawk has accumulated E & P of $180,000 and during the year, current E & P of $320,000. Hawk makes the following cash distributions: $270,000 to Ashley on March 31, $180,000 to Matt on October1 and $180,000 to Brody on December 1.
Use the format below; to (1) determine how the distributions are taxed to Ashley, Matt and Brody? (2)Ashley’s recognized gain on the 7/1 sale to Matt and Brody?
Current year E&P =
Accumulated E&P =
Distributions =
Ashley’s Basis 400,000 at the beginning of the year
Div. Inc. =
Ret. of Cap =
Basis =
Cap. Gains =
Solutions
jeff jeffy answered 2 years agoRelated Solutions
9. Ashley, the sole shareholder of Hawk Corporation, has a stock basis of $400,000 at the...
9. Ashley, the sole shareholder of Hawk Corporation, has a stock
basis of $400,000 at the beginning of the year. On
July 1, she sells all of her stock for $2 million to Matt
(1 million) and Brody (1 million) . On
January 1, Hawk has accumulated E & P of
$180,000 and during the year, current E & P of
$320,000. Hawk makes the following cash
distributions: $270,000 to Ashley on March 31,
$180,000 to Matt on October1 and...
S corporation’s sole shareholder has a basis of $20,000, and lent the corporation $20,000. The net...
S corporation’s sole shareholder has a basis of $20,000, and
lent the corporation $20,000. The net operating loss for the year
was $50,000. Explain the effect on the shareholder
5) Olivia is the sole shareholder in Western Corporation and has owned the stock for five...
5) Olivia is the sole shareholder in Western Corporation and has
owned the stock for five years. The basis in her stock is $50,000.
Western distributes $35,000 to Olivia. Accumulated earnings and
profits at the beginning of the year equal $25,000 and current
earnings and profits equal $5,000.
Required:
What are the tax consequences of this information?
What are the tax consequences of this information if, instead of
distributing $35,000 to Olivia, Western
distributes $100,000 to Olivia?
16) Sally, an individual, is the sole shareholder of LMNOP Corp and has basis of $1,500...
16) Sally, an individual, is the sole shareholder of LMNOP Corp
and has basis of $1,500 in the stock of LMNOP Corp. LMNOP Corp has
accumulated E & P of $2,000 and no current E & P for the
current year, 2018. In 2018, LMNOP Corp distributes $3,400 to
Sally. Calculate the following:
A) Dividend income to Sally. If none, please indicate.
B) Return of capital to Sally. If none, please indicate.
C) Capital gain to Sally. If none, please...
What is the basis of the stock in the hands of the shareholder, and what is the basis of the property contributed in the hands of the corporation?
Explain the 80% rule as it pertains to the formation of a corporation.
An individual contributes property with a fair market value in excess of basis to a corporation in exchange for stock. What is the basis of the stock in the hands of the shareholder, and what is the basis of the property contributed in the hands of the corporation?
A corporation may make a distribution to its shareholders. Depending on the circumstances, in the hands of the...
1. Explain the tax effect to the corporation and to the sole shareholder. XYZ Corporation has...
1. Explain the tax effect to the corporation and to the sole
shareholder.
XYZ Corporation has one shareholder. The shareholder’s tax basis
in his shares is $60,000. Corporate E&P BEFORE the effects of
any distribution is $10,000. The corporation distributes the
following property: The cororation distributes land with FMV of
$120,000 and a tax basis to the corporation of $70,000.
Eva has been the sole shareholder of a calendar year S-Corporation since its inception. Eva’s stock...
Eva has been the sole shareholder of a
calendar year S-Corporation since its inception. Eva’s stock basis
is $50,000, her debt basis is $15,000 and she receives a cash
distribution of $88,000. There are no special elections made.
a. What
is the tax impact of the distribution if the S-Corporation has
accumulated adjustment account of $40,000, adjusted earning and
profit of $30,000 and $0 other adjustment account before the
distribution?
Eva has been the sole shareholder of a calendar year S-Corporation since its inception. Eva’s stock...
Eva has been the sole shareholder of a calendar year
S-Corporation since its inception. Eva’s stock basis is $50,000,
her debt basis is $15,000 and she receives a cash distribution of
$88,000. There are no special elections made. All calculations must
be shown. Answers containing words or paragraph, without
calculations, will not be counted.
What is the tax impact of the distribution if the S-Corporation
has accumulated adjustment account of $40,000, adjusted earning and
profit of $30,000 and $0 other...
Eva has been the sole shareholder of a calendar year S-Corporation since its inception. Eva’s stock...
Eva has been the sole shareholder of a calendar year
S-Corporation since its inception. Eva’s stock basis is $50,000,
her debt basis is $15,000 and she receives a cash distribution of
$88,000. There are no special elections made. All calculations must
be shown. Any answers containing words or paragraphs without
calculations will not be counted.
What is the tax impact of the distribution if instead the
S-Corporation has accumulated adjustment account of $40,000, $0
adjusted earning and profit and $0...
Bart has been the sole shareholder of a calendar year S-Corporation since its inception. Bart’s stock...
Bart has been the sole shareholder of a calendar year
S-Corporation since its inception. Bart’s stock basis is $35,000,
his debt basis is $15,000 and he receives a cash distribution of
$65,000. There are no special elections made. What is the tax
impact of the distribution if:
The S-Corporation has AAA of $30,000, AEP of $20,000 and $0 OAA
before the distribution.
The S-Corporation has AAA of $30,000, $0 AEP and $0 OAA before
the distribution.
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