What are the tax consequences of the distribution to iceberg

Assignment Help Taxation
Reference no: EM131794286

Problem

Iceberg Lounge, Inc., is an accrual basis corporation which reports on the calendar year. Oswald Cobblepot owns 90% of the stock (he cut Butch in) and has a stock basis of $90,000. On January 1 of the current year, Iceberg had accumulated E & P of $200,000. Operating income (exclusive of the following transactions, generated current E & P of $50,000. On November 1, Iceberg distributes an warehouse building to Oswald. The building had a FMV of $100,000 and a basis of $80,000. Oswald assumed the $110,000 mortgage on the warehouse. His accountant, Nygma, had used the ADS depreciation method for both income tax and E & P purposes.

What are the tax consequences of the distribution to a. Iceberg and b. Oswald (no one cares about Butch).

(In your answer, be sure to describe the effects on taxable income for both of them, the impact of the distribution on E & P, and Oswald's basis in the warehouse.)

Reference no: EM131794286

Questions Cloud

Determined its ending inventory at cost : Monster Company began operations in 2013 and, as presented below, determined its ending inventory at cost and at NRV as of December
Explain what may be going on by adding chemical : It is found that a certain plasma etch chemistry in a certain RIE etch system pro-duces vertical sidewalls with zero etch bias when etching a particular film.
Public image is more important to creatives : Public image is more important to Creatives than it is to all teens, in general.
What is Niendorf new required return : Niendorf Corporation's stock has a required return of 15.00%, the risk-free rate is 4.00%, and the market risk premium is 5.00%.
What are the tax consequences of the distribution to iceberg : Iceberg Lounge, Inc., is an accrual basis corporation. What are the tax consequences of the distribution to Iceberg and Oswald (no one cares about Butch).
Calculate a variable rate for the maintenance department : Calculate the allocated fixed cost for each using department based on its budgeted peak month usage in maintenance hours
Discuss about production in the fourth quarter : how many units should be scheduled for production in the fourth quarter
Manufactures oxygen delivery systems : You're evaluating a proposal from a hospital equipment company that manufactures oxygen delivery systems.
Compute the dollar amount of the total current assets : On December 31, Gray Company has the following list. Compute the dollar amount of the total current assets as it would appear on the December 31 balance sheet

Reviews

Write a Review

Taxation Questions & Answers

  Taxable income

Determine taxable income before considering expense.

  Prepare a tax research memo

Prepare a tax research memo to the file that addresses the issues you feel are most relevant to Mimi's various issures.

  Income by ordinary concepts

Explain what is meant by income by ordinary concepts

  Identify the tax issues

Identify the tax issues that are raised and the relevant sections of the legislation. Identify any cases and other sources of law or information that apply.

  Calculate carolines taxable income

Calculate Carolines taxable income

  Taxation – law and practice

Show the tax issues that are raised and the relevant sections of the legislation.

  Payment to the taxpayer

Brief statement in your own words of the facts of the cases.

  Prepare regular corporation tax return

Prepare the C Regular Corporation Tax Return for the Lawson And Norman Enterprise

  Taxation law

Advise the participants in the ‘barter' system of the income tax implications, if any, of participating in the system.

  A tax on cigarettes is a good way of raising tax revenue

Discuss- A tax on cigarettes is a good way of raising tax revenue for the government

  Prepare the required journal entry

Prepare the required journal entry to record the tax expense

  Calculate barbs taxable income

Calculate Barb's taxable income? What nonrefundable credit is Barb eligible for based on the information you have?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd