Stevie D. contributed property to Animal Corp, an S-Corporation, with a FMV of $50,000 and a basis of $30.000 in Y1 for a 50% ownership percentage. During Y1 and Y2, Animal Corp. reported income totaling $50,000 and made distributions totaling $100,000 (proportionally to each shareholder). In Y3 Animal Corp. reported an ordinary business loss of $20,000. What was Stevie D's deductible Y3 loss attributable to Animal Corp.? O $0 deductible loss. O $10,000 deductible loss. $9,000 deductible loss. $7,500 deductible loss.

Stevie D. contributed property to Animal Corp, an S-Corporation, with a FMV of $50,000 and a basis of $30.000 in Y1 for a 50% ownership percentage. During Y1 and Y2, Animal Corp. reported income totaling $50,000 and made distributions totaling $100,000 (proportionally to each shareholder). In Y3 Animal Corp. reported an ordinary business loss of $20,000. What was Stevie D's deductible Y3 loss attributable to Animal Corp.? O $0 deductible loss. O $10,000 deductible loss. $9,000 deductible loss. $7,500 deductible loss.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter22: S Corporations

Section: Chapter Questions

Problem 23CE

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Stevje D. cantributed property to Anlmal Corp, an S-Corporation, with a FMV of $50,000 and a basis of $30,000 in Y1 for a 50% ownership percentage. During Y1 and Y2, Animal Corp. reported income totaling $50,000 and made distributions tataling $100,000 (proportionally to each shareholder). In Y3 Animal Corp. reported an ordinary business loss of $20,000. What was Stevle D's deductible Y3 loss attributable to Animal Corp.? $0 deducoible loss Tr $10,000 deductible loss $5.000de los elu loss $7.500 deductible loss
Terry is the sole shareholder of Magic Corporation, an 5-Corporation formed 1/1/Y1. Terry initially contributed property to form the corporation with a FMV of $100,000 and a basis of $75,000. The following transactions occurred in Y1: Ordinary Business Income $23,000 %3D Tax Exempt Interest Income%3D $10,000 Short Term Capital Losses $3,000 (no other canital gains or losses) Nondeductible Expenses $5,000 %3D %3D In addition Terry withdrew $40,000 from Magic Corporation. What was Tery's gross income increase and stock basis in Magic Corporation stock at the end of Y1? Gross Income $22,000 - Basis $62.000. Gross Income $22.000 - Basis = $82.000. Gross Income $17,000 Basis = $62,000. %3D Gross Income $17,000- Basis = $62,000. %3D
C Corporation ("C") had accumulated E&P of $30,000 at the beginning of the current year. During the current year, X distributed property fair market value $30,000, adjusted basis of $35,000 and subject to a liability of $10,000 to shareholder A. This was the only transaction C had during the current year. As a result, A will recognize $20,000 dividend income, and C will have accumulated E&P of $5,000 at the beginning of the next year. True False
XYZ Corporation, a calendar year C Corporation, has $100,000 gross business receipts, $5,000 interest income from corporate bonds, $20,000 qualified dividend income from a 5% owned C Corporation, $110,000 business expenses, and $2,000 charitable contribution. How much is XYZ's taxable income (or net operating loss) for the current year?\\n\\nGroup of answer choices\\n\\n$0 Taxable income.\\n\\n$3,000 Taxable income.\\n\\n$6,500 Taxable income.\\n\\n$6,750 Taxable income.
X Corporation was formed in Year 1. In Year 1, X Corporation: (i) received $100,000 of revenue, (ii) a $20,000 dividend distribution from Y Corporation (X owned less than 1% of Y and received a $10,000 DRD) (iii) purchased a Section 179 asset for $10,000, (iv) paid $21,000 of federal tax and (v) distributed $10,000 cash to each of its two shareholders A and B. In Year 2, X received $50,000 of revenue and contributed $12,000 to cash to a qualified charity. X made no distributions in Year 2. a. What is X' Accumulated E&P at the beginning of Year 2? (Write your answer as a number only, i.e. $5,000) b. What is X' Accumulated E&P at the beginning of Year 3? (Write your answer as a number only, i.e. $12,000)
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.
Marathon Inc. (a C corporation) reported $1,650,000 of taxable income in the current year. During the year, it distributed $165,000 as dividends to its shareholders as follows: (Leave no answer blank. Enter zero if applicable.) $8,250 to Guy, a 5 percent individual shareholder. $24,750 to Little Rock Corp., a 15 percent shareholder (C corporation). $132,000 to other shareholders. a. How much of the dividend payment did Marathon deduct in determining its taxable income? b. Assuming Guy's marginal ordinary tax rate is 37 percent, how much tax will he pay on the $8,250 dividend he recieved from Marathon Inc. c. What amount of tax will Little Rock Corp.pay on the $24,750 dividend it recieved from Marathon Inc. (50 percent dividends recieved deduction)?
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.
Dallas Corporation, not a dealer in securities, realizes taxable income of $60,000 from the operation of its business. Additionally, in the same year, Dallas realizes a long-term capital loss of $10,000 from the sale of marketable securities. If the corporation realizes no other capital gains or losses, what is the proper treatment for the $10,000 long-term capital loss on the tax return? Carry the $10,000 long-term capital loss back three years as a short-term capital loss, then forward five years. Use $10,000 of the long-term capital loss to reduce taxable income. Use $6,000 of the loss to reduce taxable income and carry $4,000 of the long-term capital loss forward for five years. Use $3,000 of the loss to reduce taxable income and carry $7,000 of the long-term capital loss forward for five years.
During the current year, Swallow Corporation, a calendar year C corpora- tion, has the following transactions: Income from operations $660,000Expenses from operations 760,000Dividends received from Brown Corporation 240,000 Swallow Corporation owns 12% of Brown Corporation’s stock. How much is Swallow’s taxable income or NOL for the year? Assume instead that Swallow Corporation owns 26% of Brown Corporation’s stock. How much is Swallow’s taxable income or NOL for the year?
Amazon Corporation distributes equipment (basis of $80,000 and fair market value of $100,000) as a property dividend to its shareholders. The equipment is subject to a liability of $120,000. Amazon Corporation recognizes gain of: a. $0 b. $20,000. c. $30,000. d. $40,000. e. None of the choices.
The Tomato 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. Tomato distributes the property in a nonliquidating distribution (along with the debt) to Mitch, its sole shareholder. What is the amount of the distribution to Mitch? a. $80,000. b. $50,000. c. zero. d. $30,000. e. none of the above.