Question
In: Accounting
USAco, a domestic corporation, is a wholly-owned subsidiary of FORco, a foreign corporation. USAco's only assets...
USAco, a domestic corporation, is a wholly-owned subsidiary of FORco, a foreign corporation. USAco's only assets are cash of $200,000, accounts receivable of $200,000 and its U.S. manufacturing plant worth $500,000. USAco has no liabilities. Assume that there is no intangible value in USAco and that the manufacturing plant is a USRPI. During the current year, FORco sells all of its shares of USAco to an unrelated U.S.person. Is FORco's sale of stock in USAco subject to withholding under FIRPTA? If so, how is the withholding determined?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
USAco is a wholly-owned U.S. subsidiary of ForCo, a foreign corporation. USAco's only assets are cash...
USAco is a wholly-owned U.S. subsidiary of ForCo, a foreign
corporation. USAco's only assets are cash of $400,000, accounts
receivable of $400,000, and its U.S. manufacturing plant with a
value of $1 million. In addition, USAco has carried a mortgage on
the manufacturing plant of $600,000 for the last 10 years. ForCo
sells its shares to a buyer for $1,800,000. Which of the following
best describes the tax implications?
Question 20 options:
1)
The buyer does not have to withhold....
Portsmouth Corporation, a British corporation, is a wholly owned subsidiary of Salem Corporation, a U.S. corporation....
Portsmouth Corporation, a British corporation, is a wholly owned
subsidiary of Salem Corporation, a U.S. corporation. During the
year, Portsmouth reported the following income:
$250,000 interest income received from a loan to an unrelated
French corporation.
$100,000 dividend income received from a less than 1 percent owned
unrelated Dutch corporation.
$150,000 rent income from an unrelated British corporation on
property Portsmouth actively manages.
$500,000 gross profit from the sale of inventory manufactured by
Portsmouth in Great Britain and sold to...
The separate condensed balance sheets of Patrick Corporation and its wholly-owned subsidiary, Sean Corporation, are as...
The separate condensed balance sheets of Patrick Corporation and
its wholly-owned subsidiary, Sean Corporation, are as follows:
BALANCE SHEETS December 31, 2020 Patrick Sean Cash $ 76,000 $
74,000 Accounts receivable (net) 144,000 22,000 Inventories 84,000
74,000 Plant and equipment (net) 622,000 266,000 Investment in Sean
456,000 - Total assets $ 1,382,000 $ 436,000 Accounts payable
160,000 88,000 Long-term debt 100,000 34,000 Common stock ($10 par)
326,000 50,000 Additional paid-in capital 14,000 Retained earnings
796,000 250,000 Total liabilities and shareholders'...
The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are...
The separate condensed balance sheets of Patrick Corporation and
its wholly owned subsidiary, Sean Corporation, are as follows:
BALANCE SHEETS
December 31, 2017
Patrick
Sean
Cash
$
80,000
$
56,000
Accounts receivable (net)
140,000
40,000
Inventories
88,000
50,000
Plant and equipment (net)
624,000
260,000
Investment in Sean
474,000
-
Total assets
$
1,406,000
$
406,000
Accounts payable
178,000
98,000
Long-term debt
100,000
34,000
Common stock ($10 par)
338,000
80,000
Additional paid-in capital
8,000
Retained earnings
790,000
186,000
Total liabilities and...
The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are...
The separate condensed balance sheets of Patrick Corporation and
its wholly owned subsidiary, Sean Corporation, are as follows:
BALANCE SHEETS
December 31, 2017
Patrick
Sean
Cash
$
70,000
$
56,000
Accounts receivable (net)
144,000
30,000
Inventories
100,000
42,000
Plant and equipment (net)
628,000
260,000
Investment in Sean
440,000
-
Total assets
$
1,382,000
$
388,000
Accounts payable
170,000
98,000
Long-term debt
102,000
22,000
Common stock ($10 par)
340,000
62,000
Additional paid-in capital
14,000
Retained earnings
770,000
192,000
Total liabilities and...
The Hudson Valley Juice Company is a wholly owned subsidiary of National Beverage Corporation, headquartered in...
The Hudson Valley Juice Company is a wholly owned subsidiary of
National Beverage Corporation, headquartered in Cincinnati, Ohio.
At its plant in Poughkeepsie, New York, Hudson Valley manufactures
a number of different natural fruit juices, based on the fruits of
Local region. It's most popular juice drink products are • Apple •
Grape • Cherry
New source
At a Cincinnati meeting sponsored by the parent company,
National Beverage Corporation, Debbie Wagner, Hudson Valley's
purchasing agent for packaging materials, had met...
Lynch Corporation has a wholly owned subsidiary in Mexico (Lynmex) with two distinct and unrelated lines...
Lynch Corporation has a wholly owned subsidiary in Mexico
(Lynmex) with two distinct and unrelated lines of business.
Lynmex’s Small Appliance Division manufactures small household
appliances such as toasters and coffeemakers at a factory in
Monterrey, Nuevo Leon, and sells them directly to retailers such as
Gigantes throughout Mexico. Lynmex’s Electronics Division imports
finished products produced by Lynch Corporation in the United
States and sells them to a network of distributors operating
throughout Mexico.
Lynch’s CFO believes that the two...
Lynch Corporation has a wholly owned subsidiary in Mexico (Lynmex) with two distinct and unrelated lines...
Lynch Corporation has a wholly owned subsidiary in Mexico
(Lynmex) with two distinct and unrelated lines of business.
Lynmex’s Small Appliance Division manufactures small household
appliances such as toasters and coffeemakers at a factory in
Monterrey, Nuevo Leon, and sells them directly to retailers such as
Gigantes throughout Mexico. Lynmex’s Electronics Division imports
finished products produced by Lynch Corporation in the United
States and sells them to a network of distributors operating
throughout Mexico.
Lynch’s CFO believes that the two...
On April 1, 2020, Republic Company sold equipment to its wholly owned subsidiary, Barre Corporation, for...
On April 1, 2020, Republic Company sold equipment to its wholly
owned subsidiary, Barre Corporation, for $40,000. At the time of
the transfer, the asset had an original cost (to Republic) of
$60,000 and accumulated depreciation of $25,000. The equipment has
a five year estimated remaining life.
Barre reported net income of $250,000, $270,000 and $310,000 in
2020, 2021, and 2022, respectively. Republic received dividends
from Barre of $90,000, $105,000 and $120,000 for 2020, 2021, and
2022, respectively.
What was...
In January of 2019, a wholly owned subsidiary sold Equipment to the parent for a cash...
In January of 2019, a wholly owned subsidiary sold Equipment to
the parent for a cash price of $122,500. The subsidiary had
acquired the equipment at a cost of $140,000 and the estimated
useful life when purchased was 10 years, and there was no salvage
value. The subsidiary had depreciated the equipment for 4 years at
the time of sale using the straight line method. The parent
retained the depreciation policy of the subsidiary and depreciated
the equipment over its...
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