Nontaxable return of capital

Reference no: EM131007037

Candy Corp. is a C Corporation that began operations in Year 1. Candy Corp.'s Year 1 through Year 3 taxable earnings and profits are as follows:

Year E&P

1 (25,000)

2 5,000

3 10,000

On the last day of Year 3 Candy Corp. makes a $12,500 cash shareholder distribution, distributed equally among its two shareholders, Goode and Plenteau. How much of Goode's distribution is a nontaxable return of capital? Assume sufficient basis in Goode's stock investment.

Reference no: EM131007037

Questions Cloud

Determining the company wacc : The before-tax cost of debt is 7.50%, and the tax rate is 40%. The target capital structure consists of 45% debt and 55% common equity. What is the company's WACC if all the equity used is from retained earnings?

Give the absolute maxima and minima : Give all relative maxima and minima and when they occur on the interval. Give the absolute maxima and minima and when they occur on the interval. Interpret your results.

Problem regarding the sec enforcement action : The following assignment is for an advanced auditing class.The textbook used for this class is"Auditing: A risk-based approach to conducting a quality audit" (9th Ed.) by Johnston, Gramling, & Rittenberg. The assignment description is as follows:

Topaz financed the purchase with a bank loan : On January 1, 2014, Topaz Corp. purchased a piece of equipment with a list price of $60,000. The following amounts were related to the equipment purchase:

Nontaxable return of capital : On the last day of Year 3 Candy Corp. makes a $12,500 cash shareholder distribution, distributed equally among its two shareholders, Goode and Plenteau. How much of Goode's distribution is a nontaxable return of capital? Assume sufficient basis in..

Find the rate of change of angle of elevation of airplane : Find the rate of change of the angle of elevation of the airplane from the observer when the angle of elevation is 45 degrees?

Evaluate demand scenario : Evaluate demand scenario and select an appropriate S&OP strategy

Define the project particulars for illustrative purposes : To do this, define the project particulars for illustrative purposes, explain how the project team was selected, explain how team problems were resolved, discuss how you utilized PM software to manage team activities

Simple forecasting model : Harlen Industries has a simple forecasting model: Take the actual demand for the same month last year and divide that by the number of fractional weeks in that month. This gives the average weekly demand for that month. This weekly average is used as..

User Account

All Pages