Fact pattern for questions 17 and 18 happy inc

Assignment Help Accounting Basics

Reference no: EM13593690

Fact Pattern for Questions 17 and 18. Happy Inc. is a calendar year corporation. Happy Inc. had no accumulated earnings and profits, but had $100,000 of current earnings and profits in 2012. On December 31, 2012, Happy Inc. distributed a total of $160,000 to its two equal shareholders, Betty and Bob. On the date of the cash distribution, Betty's basis in her Happy Inc. stock was $10,000 and Bob's basis in his Happy Inc. stock was $30,000.

1. How much does Betty include in her gross income for the current taxable year with respect to the distribution to her?

a. $50,000 dividend income and $10 capital gain.

b. $80,000 dividend income and 0 capital gain.

c. $0 dividend income and $70,000 capital gain.

d. $50,000 dividend income and $20,000 capital gain.

2.What is Bob's adjusted basis in his EFG Inc. stock after the distribution?

a. 0.

b. $5,000.

c. $15,000.

d. none of the above.

Reference no: EM13593690

Questions Cloud

The atom decays and ejects an electron of speed 48c : a radio active atom in a beam produced by an accelerator has a speed .78c relative to the laboratory. the atom decays

For the current taxable year corporations gross income : for the current taxable year corporations gross income from operations was 1000000 and its expenses from operations

Newco inc had current earnings and profits of 150000 when : newco inc. had current earnings and profits of 150000 when it made a nonliquidating distribution to an individual

What is the percent differencenbspdelta between the : what is the percent differencenbspdelta between the newtonian and the relativistic values for the momentum of a

Fact pattern for questions 17 and 18 happy inc : fact pattern for questions 17 and 18. happy inc. is a calendar year corporation. happy inc. had no

Sandra owned an equipment rental business in her sole name : sandra owned an equipment rental business in her sole name for four years. in january of 2013 sandra transferred the

What is the magnitude and direction of the impulse imparted : a rubber ball mass 0.27 kg is dropped from a height of 1.8 m onto the floor. just after bouncing from the floor the

A 540 g ice cube initially at 0degc is dropped into a : a 54.0 g ice cube initially at 0degc is dropped into a styrofoam cup containing 375 g of water initially at 21.2degc.

Sam created mno inc several years ago and has owned all 10 : sam created mno inc. several years ago and has owned all 10 outstanding shares of mno inc. since the creation of mno

User Account

All Pages