Question

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 day of next
year?

Answer #1

Ans | ||

a) | ||

Dividend | $121,315 | ANS |

Calculation of dividend | ||

Accumulated E & P -(Current E & P *181/365) | ||

280000-(320000*181/365) | $121,315 | |

b) | ||

Tax basis in his Sooner stock is $0 | ||

Beginning tax basis -lesser of excess of accumulated E & P or his basis in Sooner stock $82500 | ||

Beginning tax basis | $82,500 | |

Lesseer of | ||

(560000-121315)=438685 | 82500 | |

or $82500 | ||

Hence tax bais is $0 | ||

c) | ||

Balance of E & P on first day of next year | $161,315 | |

Accumulated E & P | $280,000 | |

Current year deficit | -320000 | |

Dividend paid | ($121,315) | |

($161,315) | ||

If any doubt please comment |

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
$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?

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...

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 $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...

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?...

Tiger Company, a calendar year corporation, reports a deficit in
current E&P of negative ($500,000) this year and positive
accumulated E&P at the beginning of the year of $300000. Tiger
distributed $250000 to its sole shareholder on June 30 of this
year. How much of the distribution is treated as a return of
capital this year if the shareholder has a $1 million adjusted
basis in Tiger stock?
Multiple Choice
$500000
$50000
$200000
$0

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 6 minutes ago

asked 44 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 3 hours ago