Reference no: EM13983209
Heather, an individual, owns all of the outstanding stock in Silver Corporation. Heather purchased her stock in Silver nine years ago, and her basis is $56,000. At the beginning of this year, the corporation has $76,000 of accumulated earnings and profits and no current earnings and profits (before considering the effect of the distributions). What are the tax consequences to Heather (amount and type of income and basis in property received) and Silver Corporation (gain or loss and effect on earnings and profits) in each of the following situations?
Silver distributes land to Heather. The land was held as an investment and has a fair market value of $54,000 and an adjusted basis of $42,000.
Assume that Silver Corporation has no current or accumulated earnings and profits prior to the distribution. How would your answer change?
Assume that the land distributed to Heather is subject to a $46,000 mortgage (which Heather assumes). How would your answer change?
Assume that the land has a fair market value of $54,000 and an adjusted basis of $62,000 on the date of the distribution. How would your answer change?
Instead of distributing land to Heather, assume that Silver decides to distribute equipment used in its business. The equipment has a $14,000 market value, a $1,200 adjusted basis for income tax purposes, and a $5,200 adjusted basis for earnings and profits purposes. When the equipment was purchased four years ago, its original fair market value was $18,000.
Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $30,000 for the current year. Because of the lower tax rates on qualifying dividends, Kristen is considering substituting a dividend for the bonus. Assume that the tax rates are 28% for Kristen and 34% for Egret Corporation.
How much better off would Kristen be if she were paid a dividend rather than salary?
How much better off would Egret Corporation be if it paid Kristen a salary rather than a dividend?
If Egret Corporation pays Kristen a salary bonus of $40,000 instead of a $30,000 dividend, how would your answers to above change?
What should Kristen do?
|
Determine the dimensions b and t
: A wall bracket, as shown in Fig. 5.42, is subjected to a pull of P = 5 kN, at 60° to the vertical. The cross-section of bracket is rectangular having b = 3t . Determine the dimensions b and t if the stress in the material of the bracket is limited..
|
|
Is it worth the cost to search for neos
: Is it worth the cost to search for NEOs? If the odds are low for an impact in our lifetime, should we worry about the unknown threat? Are there any advantages knowing about the locations of asteroids that are nearby
|
|
Compute the magnetic flux through the loop
: What is the magnetic flux through the loop when θ is 0o? What is the magnetic flux through the loop when θ is 30o? What is the magnetic flux through the loop when θ is 60o? What is the magnetic flux through the loop when θ is 90o?
|
|
Research memo indicating how kim and toby
: Your manager asked you to prepare a research memo indicating how Kim and Toby should treat the discovery of this painting for tax purposes. Specifically, you should indicate the following:
|
|
Accumulated earnings and profits prior to the distribution
: Assume that Silver Corporation has no current or accumulated earnings and profits prior to the distribution. How would your answer change?
|
|
Article- body ritual among the nacirema
: We know Nacirema is American spelled backwards, do an analysis of the article - Cultural relativism, Ethnocentrism and Language
|
|
Find the angular acceleration of the cylinder
: Taking the clockwise direction to be negative, find the angular acceleration of the cylinder. During the rotation, the forces maintain their same angles relative to the cylinder.
|
|
Construct a bivariate table that compares the two states
: You can use 'Guided Search' or 'Advanced Search' to select two states for comparative purposes and to construct a bivariate table that compares the two states in terms of either age or racial composition. This site will provide you with the needed..
|
|
What share of the population is in the labor force
: Explain why each of these theories might make a business reluctant to cut wages for its workers, even under bad economic conditions: implicit contracts, efficiency wage theory, adverse selection of wage cuts, insider-outsider model and relative w..
|