Reference no: EM132645916
Problem - Parrot Corporation is a closely held company with accumulated E & P of $300,000 and current E & P of $350,000. Tom and Jerry are brothers; each owns a 50% share in Parrot, and they share management responsibilities equally. What are the tax consequences of each of the following independent transactions involving Parrot, Tom, and Jerry? How does each transaction affect Parrot's E & P?
a. Parrot sells an office building (adjusted basis of $350,000; fair market value of $300,000) to Tom for $275,000.
b. Parrot lends Jerry $250,000 on March 31 of this year. The loan is evidenced by a note and is payable on demand. No interest is charged on the loan (the current applicable Federal interest rate is 3%).
c. Parrot owns an airplane that it leases to others for a specified rental rate. Tom and Jerry also use the airplane for personal use and pay no rent. During the year, Tom used the airplane for 120 hours and Jerry used it for 160 hours. The rental value of the airplane is $350 per hour, and its maintenance costs average $80 per hour.
d. Tom leases equipment to Parrot for $20,000 per year. The same equipment can be leased from another company for $9,000 per year.
|
Discuss family culture and its effect on patient education
: Discuss family culture and its effect on patient education. List some approaches the health care professional can use to address religious and cultural.
|
|
Compute what is the expected return for the stock
: A 30% chance of a 19% rate of return. and a 20% chance of a -11% rate of return. What is the expected return for this stock?
|
|
What is the? firm debt? ratio-dearborn supplies
: Dearborn Supplies has total sales of $191 ?million, assets of $98 ?million, a return on equity of 32 ?percent, and a net profit margin of 7.3 percent.
|
|
The series of robberies-rapes or burglaries
: Compare and contrast three similarities or differences among the series of robberies, rapes, or burglaries that occurred in the 1930s, 1960s,
|
|
How does each transaction affect Parrot E-P
: What are the tax consequences of each of the following independent transactions involving Parrot, Tom, and Jerry? How does each transaction affect Parrot's E&P
|
|
How the a2m governance is organized
: Briefly explain how the "A2M" governance is organized. Do you notice any strategies in place to align manager and shareholder interests
|
|
Homeland security strategic planning is occurring is dynamic
: You know that the environment in which current homeland security strategic planning is occurring is dynamic.
|
|
How is Iris Corporation taxed on the distribution
: On November 15, Fresia Corporation, with current E & P of $320,000, How is Iris Corporation taxed on the distribution
|
|
How does company x default risk
: Company X has current assets worth $750,000, What is Company X's current ratio, and how does Company X's default risk compare to that of Company Y?
|