Question

Turnip, Inc,. an S corporation, distributes a tract of land held as an investment (FMV=$82,000, basis=$22,000)...

Turnip, Inc,. an S corporation, distributes a tract of land held as an investment (FMV=$82,000, basis=$22,000) to chang, its sole shareholder. An AAA bypass election was not made. Turnip, Inc. has an AAA balance of $10,000 an OAA balance of $15,000, a PTI balance of $5,000 and an AEP balanc eof $20,000. CHang's basis in his Turnip's stock is $20,000, has and individual marginal tax rate of 33% and a capital gains tax rate of 15%.

What is Turnip's recognized gain on the distribution?

What is the amount of CHang's distribution?

What is turnips ending AAA balance?

What is turnip's ending PTI balance?

What is Turnip's ending AEP balance?

What is Turnip's ending OAA balance?

WHat is the tax impact of the distribution to Chang?

What is Changs basis in the land

What is changs basis in his turnip stock?

Turnip, Inc,. an S corporation, distributes a tract of land held as an investment (FMV=$82,000, basis=$62,000) to chang, its sole shareholder. An AAA bypass election was not made. Turnip, Inc. has an AAA balance of $10,000 an OAA balance of $1,000, a PTI balance of $5,000 and an AEP balanc eof $2,000. CHang's basis in his Turnip's stock is $20,000, has and individual marginal tax rate of 33% and a capital gains tax rate of 15%.

What is Turnip's recognized gain on the distribution?

What is the amount of CHang's distribution?

What is turnips ending AAA balance?

What is turnip's ending PTI balance?

What is Turnip's ending AEP balance?

What is Turnip's ending OAA balance?

How much of the distribution is a return of capital?

How much of the distribution is an excess distribution?

WHat is the tax impact of the distribution to Chang?

What is Changs basis in the land

What is Changs basis in his turnip stock?

Turnip, Inc,. an S corporation, distributes a tract of land held as an investment (FMV=$82,000, basis=$62,000) to chang, its sole shareholder. An AAA bypass election was not made. Turnip, Inc. has an AAA balance of $10,000 an OAA balance of $1,000, a PTI balance of $5,000 and an AEP balanc eof $2,000. CHang's basis in his Turnip's stock is $20,000, has and individual marginal tax rate of 33% and a capital gains tax rate of 15%.

What is Turnip's recognized gain on the distribution?

What is the amount of CHang's distribution?

What is turnips ending AAA balance?

What is turnip's ending PTI balance?

What is Turnip's ending AEP balance?

What is Turnip's ending OAA balance?

How much of the distribution is a return of capital?

How much of the distribution is an excess distribution?

WHat is the tax impact of the distribution to Chang?

What is Changs basis in the land

What is Changs basis in his turnip stock?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Turnip's recognized gain on the distribution –

$(82000-22000) =$60000

Amount of CHang's distribution -$82000

turnips ending AAA balance –                  

tax impact of the distribution to Chang-

Capital Gain Tax =15%of $60000

Changs basis in the land- Land received will increase its investment value in turnip stock

changs basis in his turnip stock- It will hve no impact as regards to its stock as chang is a sole shareholder of turnip stock.

Note – Unable to understand the terms AAA, PTI, AEP & OAA

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
Turnip, Inc., a C corporation, distributes a tract of land held as an investment (FMV =...
Turnip, Inc., a C corporation, distributes a tract of land held as an investment (FMV = $82,000, basis = $22,000) to Chang, its majority (60%) shareholder in exchange for all of his stock. The land is subject to a liability of $100,000. Turnip, Inc. has accumulated E & P of $50,000 and a marginal tax rate of 21%. Chang’s basis in his Turnip’s stock is $20,000 and has an individual marginal tax rate of 32%, a long-term capital gains tax...
Turnip, Inc., a C corporation, distributes a tract of land held as an investment (FMV =...
Turnip, Inc., a C corporation, distributes a tract of land held as an investment (FMV = $82,000, basis = $22,000) to Chang, its majority (60%) shareholder in exchange for all of his stock. The land is subject to a liability of $100,000. Turnip, Inc. has accumulated E & P of $50,000 and a marginal tax rate of 21%. Chang’s basis in his Turnip’s stock is $20,000 and has an individual marginal tax rate of 32%, a long-term capital gains tax...
1. Turnip, Inc., a C corporation, distributes a tract of land held as an investment (FMV...
1. Turnip, Inc., a C corporation, distributes a tract of land held as an investment (FMV = $82,000, basis = $22,000) to Chang, its majority (60%) shareholder in exchange for all of his stock. Turnip, Inc. has accumulated E & P of $50,000 and a marginal tax rate of 21%. Chang’s basis in his Turnip’s stock is $20,000 and has an individual marginal tax rate of 32%, a long-term capital gains tax rate of 15%, and $100,000 of other long-term...
a U.S. Citizen, is a sole shareholder of S corporation. He has $5,000 basis in stock....
a U.S. Citizen, is a sole shareholder of S corporation. He has $5,000 basis in stock. also loaned money to S Corporation and has basis of $3,000. Assume no AEP, calendar year and beginning balance of AAA and OAA accounts are zero. The corp. made $10,000 in the ordinary income which was reported on K-1. Corp. also received a tax- free interest income of $4,000 which was also reported on K-1. Ryan took a distribution of $21,000 during the year...
Kion and Simba formed Lion Inc., a C-Corporation. Kion transfers land (FMV 650,000 and adjusted basis...
Kion and Simba formed Lion Inc., a C-Corporation. Kion transfers land (FMV 650,000 and adjusted basis of $350,000) for 50% of the stock in the corporation. Simba transfers equipment (FMV 350,000 adjusted basis of $200,000) and will provide management services worth $250,000 after Lion Inc. opens for business for 50% of the stock in the corporation. a. Will the transfer qualify under §351 as a tax free transfer? Explain. b. What are the tax consequences to Kion and Simba including...
Hanover, Inc., is an S corporation. Shawn, the sole shareholder, has a stock basis of 10,000...
Hanover, Inc., is an S corporation. Shawn, the sole shareholder, has a stock basis of 10,000 at January 1, 20X1, and an accumulated adjustments account (AAA) balance of $0. Hanover, Inc., has never been a C corporation. For 20X1, the following takes place regarding Hanover, Inc.: Taxable income $40,000 Tax-exempt income $5,000 Capital gain $8,000 Expenses applicable to tax-exempt income $1,000 Charitable contributions $2,000 Disallowed 50% of meal & entertainment expenses $500 Cash distribution to Shawn $20,000 What is the...
Two years ago, Advantage Appliance, Inc., an S corporation, purchased a plot of investment land for...
Two years ago, Advantage Appliance, Inc., an S corporation, purchased a plot of investment land for $208,000. This year, Advantage Appliance distributed the land, now worth $377,000, to Phillipa, its majority shareholder. If an amount is zero, enter, "0". a. Determine the effects of the distribution on the gross income of Advantage Appliance and Phillipa, and on Advantage Appliance’s AAA balance. As a result of the distribution, Advantage Appliance recognizes a capital gain of $_________ which increases Advantage Appliance’s AAA...
On January 1, 2010, Kinney Inc., an electing S corporation, has $4000 of AEP and a...
On January 1, 2010, Kinney Inc., an electing S corporation, has $4000 of AEP and a balance of $10,000 in AAA. Kinney has two shareholders, Erin and Maine, each of whom owns 500 shares pf Kinney's stock. Kinney's 2010 taxable income is $5000. Kinney distributes $6000 to each shareholder on Feb. 1. 2010, and distributes another $3000 to each shareholder on September 1. How is Erin taxed on this distribution? a. $500 dividend income b. $1000 dividend income c. $1500...
Lark Corp. distributes land with a fair market value of $80,000 and an adjusted basis of...
Lark Corp. distributes land with a fair market value of $80,000 and an adjusted basis of $55,000, to its shareholder, Hal. The land is subject to a liability of $34,000. Assume that Lark has sufficient Earnings and Profits that any distribution to Hal will be taxable as a dividend to him. Required: Answer the following questions. a. How much dividend income will Hal have to report on his tax return for the current year? What will be Hal's basis in...
3. Kevin and Lori formed Wonderful Inc., a C-Corporation. Kevin transfers land (FMV $250,000 and adjusted...
3. Kevin and Lori formed Wonderful Inc., a C-Corporation. Kevin transfers land (FMV $250,000 and adjusted basis of 90,000) for 50% of the stock in the corporation and $20,000 cash. Lori transfers equipment (FMV 30,000 adjusted basis of $5,000) and will provide management services worth $200,000 after Wonderful Inc. opens for 50% of the stock in the corporation. (7 points) a. Will the transfer qualify under §351 as a tax free transfer? Explain. b. What are the tax consequences to...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT