Question

Lupe and Rodrigo, father and son, each own 50% of the stock outstanding of Heron Corporation...

Lupe and Rodrigo, father and son, each own 50% of the stock outstanding of Heron Corporation (E & P of $400,000). During the current year, Heron redeems all of Lupe’s shares for $250,000. The transaction cannot qualify as a complete termination redemption if:

a. Lupe received a $250,000 note receivable from Heron in the stock redemption.

b. Lupe loaned Heron Corporation $50,000 two years following the redemption.

c. Rodrigo continued to serve on Heron Corporation’s board of directors for two years following the redemption.

d. Three years after the redemption, Lupe inherited Rodrigo’s shares in Heron as a result of his son’s death.

e. None of the above.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Question 27 Henry, Emmy, and Frannie, unrelated individuals, own all of the stock in New Corporation...
Question 27 Henry, Emmy, and Frannie, unrelated individuals, own all of the stock in New Corporation with earnings and profits of $1,200,000 as follows: Henry own 1,300 shares; Emmy owns 400 shares; and Frannie owns 300 shares. New Corporation redeems 300 of Henry’s shares with a basis of $60,000 for $450,000. With respect to the distribution in redemption of the stock: A. Henry has a capital gain of $390,000. B. Henry has dividend income of $450,000. C. Henry has dividend...
Plane Corporation has 1,200 shares of stock outstanding. Clark owns 300 shares, Clark's father owns 200...
Plane Corporation has 1,200 shares of stock outstanding. Clark owns 300 shares, Clark's father owns 200 shares, Clark's daughter owns 100 shares, and Clark's aunt owns 200 shares. Balloon Corporation owns the other 400 shares in Plane Corporation. Clark owns 25% of the stock in Balloon Corporation. Applying the § 318 stock attribution rules, how many shares does Clark own in Plane Corporation?______ Hawk Corporation (E & P of $700,000) has 3,000 shares of common stock outstanding. Federico owns 1,500...
Amy owns 500 shares of Dalek Corporation with a stock basis of $50,000. Total outstanding shares...
Amy owns 500 shares of Dalek Corporation with a stock basis of $50,000. Total outstanding shares of Dalek Corporation are 1,000. Of the remaining 500 shares, 50 shares are owned by River (her daughter), and the remaining 450 shares of Dalek Corporation are owned by an unrelated shareholder. Dalek Corporation has E&P of $640,000. What are the tax consequences to Amy if in a stock redemption; Dalek redeems 100 shares from Amy for $30,000? What are the tax consequences to...
Helen, Greg, and Wanda own the stock in HGW Corporation with earnings and profits of $900,000...
Helen, Greg, and Wanda own the stock in HGW Corporation with earnings and profits of $900,000 as follows: Helen, 600 shares; Greg, 400 shares; and Wanda, 1,000 shares. Greg is Helen’s son, and Wanda is Helen’s sister. HGW Corporation redeems 400 of Helen’s shares with a basis of $55,000 for $240,000. Helen purchased the stock three years ago as an investment. With respect to the stock redemption, Helen has: Group of answer choices Dividend income of $185,000 Dividend income of...
A. MDC Corporation (E & P of $800,000) has 1,000 shares of stock outstanding. That stock...
A. MDC Corporation (E & P of $800,000) has 1,000 shares of stock outstanding. That stock is held by Jeff (550 shares) and Thomas (450 shares), who are unrelated individuals. Bell redeems 450 of Jeff’s shares for $1,000 per share. Jeff paid $800 per share for his Bell stock nine years ago. This is a qualified redemption. What is Jeff’s realized gain/ loss? What is his recognized gain/ loss? What is the character of the recognized gain/ loss? B: See...
QUESTION 21 Corporation Z distributes in kind its long held Apple stock with an adjusted basis...
QUESTION 21 Corporation Z distributes in kind its long held Apple stock with an adjusted basis of $480 and a fair market value of $200 to shareholder C. Corporation Z also distributes Apple stock with an adjusted basis of $120 at a fair market value of $200 to shareholder D. a. Corporation Z does not have loss on the distributions. b. The distributions to C will reduce E&P by $480 (but not create negative E&P). c. Corporation Z realizes gain...
Veronica and Tracy, unrelated individuals, own all the stock in Beige Corporation as equal shareholders. Each...
Veronica and Tracy, unrelated individuals, own all the stock in Beige Corporation as equal shareholders. Each has a basis of $20,000 in her 20 shares. Beige Corporation has accumulated E & P of $900,000. Veronica wishes to retire in the current year and wants to sell her stock for $500,000, the fair market value. Tracy would like to purchase Veronica's shares and, thus, become the sole shareholder in Beige Corporation. However, because Tracy is short of funds, Beige Corporation redeems...
A. General Inertia Corporation made a distribution of $50,000 to Henry Tiara in partial liquidation of...
A. General Inertia Corporation made a distribution of $50,000 to Henry Tiara in partial liquidation of the company on December 31, 20X9. Henry owns 500 shares (50%) of General Inertia. The distribution was in exchange for 250 shares of Henry's stock in the company. After the partial liquidation, Henry continued to own 50% of the remaining stock in General Inertia. At the time of the distribution, the shares had a fair market value of $200 per share. Henry's income tax...
On January 1, 2020, Samsung Corporation has 400,000 shares of $3 par value common stock outstanding....
On January 1, 2020, Samsung Corporation has 400,000 shares of $3 par value common stock outstanding. On the same date the corporation’s board of directors declares a 12% stock dividend to be issue on March 2, 2020. On the declaration date, the corporation’s common stock fair market value is $4. On declaration date, the corporation will record: * Debit Stock Dividend $144,000 Debit Stock Dividend $192,000 Credit Stock Dividend $144,000 Credit Stock Dividend $192,000 A Company has 30,000 shares of...
4) A corporation issued 6,000 shares of its $2 par value common stock in exchange for...
4) A corporation issued 6,000 shares of its $2 par value common stock in exchange for land that has a market value of $84,000. The entry to record this transaction would include: A) A debit to Common Stock for $12,000. B) A debit to Land for $12,000. C) A credit to Land for $12,000. D) A credit to Additional Paid-in Capital, Common Stock for $72,000. E) A credit to Common Stock for $84,000. 5) Refer to the fact pattern in...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT