Question

5. This year Sooner Company reports current E&P of negative $300,000. Its accumulated E&P at the beginning of the year was $210,000. Sooner distributed $400,000 to its sole shareholder, Boomer Wells, on June 30 of this year. Boomer’s tax basis in his Sooner stock is $75,000. How much of the $400,000 distribution is treated as a dividend to Boomer?

6.Boilermaker, Inc. reported taxable income of $450,000 this year and paid federal income taxes of $94,500. Not included in the company’s computation of taxable income is tax-exempt income of $20,000, disallowed meals and entertainment expenses of $30,000, and disallowed expenses related to the tax-exempt income of $1,000. Boilermaker deducted depreciation of $100,000 on its tax return. Under the alternative (E&P) depreciation method, the deduction would have been $60,000. Compute the company’s current E&P.

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35. This year, Sooner Company reports a deficit in current
E&P of ($300,000). Its accumulated E&P at the beginning of
the year was $200,000. Sooner distributed $400,000 to its sole
shareholder, Boomer Wells, on June 30 of this year. Boomer’s tax
basis in his Sooner stock is $75,000.
a) How much of the $400,000 distribution is treated as a
dividend to Boomer?
b) What is Boomer’s tax basis in his Sooner stock after the
distribution?
c) What is Sooner’s balance...

This year, Sooner Company reports current E&P of negative
$320,000. Its accumulated E&P at the beginning of the year was
$280,000. Sooner distributed $560,000 to its sole shareholder,
Boomer Wells, on June 30 of this year. Boomer’s tax basis in his
Sooner stock is $82,500. a.How much of the distribution is treated
as a dividend to Boomer? b. What is Boomer’s tax
basis in his Sooner stock after the distribution? c.What is
Sooner’s balance in accumulated E&P on the first...

This year, Sooner Company reports current E&P of negative
$400,000. Its accumulated E&P at the beginning of the year was
$316,000. Sooner distributed $632,000 to its sole shareholder,
Boomer Wells, on June 30 of this year. Boomer’s tax basis in his
Sooner stock is $110,000. (Leave no answer blank. Enter zero if
applicable. Negative amounts should be indicated by a minus sign.)
c. What is Sooner’s balance in accumulated E&P on the first day
of next year?

The following information applies to the questions displayed
below.] This year, Sooner Company reports current E&P of
negative $398,000. Its accumulated E&P at the beginning of the
year was $386,000. Sooner distributed $772,000 to its sole
shareholder, Boomer Wells, on June 30 of this year. Boomer’s tax
basis in his Sooner stock is $91,500. (Leave no answer blank. Enter
zero if applicable. Negative amounts should be indicated by a minus
sign.) a. How much of the $772,000 distribution is
treated...

33. Hawkeye Company reports current E&P of $300,000 this
year and accumulated E&P at the beginning of the year of
$200,000. Hawkeye distributed $400,000 to its sole shareholder, Ray
Kinsella, on December 31 of this year. Ray’s tax basis in his
Hawkeye stock is $75,000.
a) How much of the $400,000 distribution is treated as a
dividend to Ray?
b) What is Ray’s tax basis in his Hawkeye stock after the
distribution?
c) What is Hawkeye’s balance in accumulated E&P...

Jayhawk Company reports current E&P of $465,000 and
accumulated E&P of negative $315,000. Jayhawk distributed
$542,500 to its sole shareholder, Christine Rock, on the last day
of the year. Christine’s tax basis in her Jayhawk stock is
$76,250.
a. How much of the $542,500 distribution is
treated as a dividend to Christine?
b. What is Christine’s tax basis in her Jayhawk
stock after the distribution?
c. What is Jayhawk’s balance in accumulated
E&P on the first day of next year?

Elk Company reports negative current E&P of $215,000 and
positive accumulated E&P of $330,000. Elk distributed $230,000
to its sole shareholder, Barney Rubble, on December 31, 20X3.
Barney's tax basis in his Elk stock is $86,250. What is the tax
treatment of the distribution to Barney and what is his tax basis
in Elk stock after the distribution?

Jayhawk Company reports current E&P of $502,500 and
accumulated E&P of negative $350,000. Jayhawk distributed
$592,500 to its sole shareholder, Christine Rock, on the last day
of the year. Christine’s tax basis in her Jayhawk stock is $65,250.
(Leave no answer blank. Enter zero if applicable. Negative
amounts should be indicated by a minus sign.)
How much of the $592,500 distribution is treated as a dividend
to Christine?
What is Christine’s tax basis in her Jayhawk stock after the
distribution?...

Jayhawk Company reports current E&P of $377,500 and a
deficit in accumulated E&P of ($275,000). Jayhawk distributed
$452,500 to its sole shareholder, Christine Rock, on the last day
of the year. Christine’s tax basis in her Jayhawk stock is
$71,750.
a. How much of the $452,500 distribution is
treated as a dividend to Christine?
b. What is Christine’s tax basis in her Jayhawk
stock after the distribution?
c. What is Jayhawk’s balance in accumulated
E&P on the first day of...

The Loquat Corporation has book net income of $91,000 for the
current year. Included in this figure are the following items,
which are reported on the corporation's Schedule M-1,
Reconciliation of Income (Loss) per Books with Income per Return. •
Federal income tax expense $13,650 • Depreciation deducted on the
books which is not deductible for tax purposes 18,200 • Deduction
for 50 percent of meals and entertainment expense which is not
allowed for tax purposes 8,190 • Deduction for...

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