Questions from Federal Taxation

Q: What is a bootstrap acquisition? What are the tax consequences of

What is a bootstrap acquisition? What are the tax consequences of such a transaction?

Q: Explain how a corporation computes its current and accumulated E&P

Explain how a corporation computes its current and accumulated E&P balances.

Q: Why is it necessary to distinguish between current and accumulated E&

Why is it necessary to distinguish between current and accumulated E&P?

Q: Describe the effect of a $100,000 cash distribution paid

Describe the effect of a $100,000 cash distribution paid on January 1 to the sole shareholder of a calendar year corporation whose stock basis is $25,000 when the corporation has a. $100,000 of curre...

Q: Pecan Corporation distributes land to a noncorporate shareholder. Explain how the

Pecan Corporation distributes land to a noncorporate shareholder. Explain how the following items are determined: a. The amount of the distribution b. The amount of the dividend c. The shareholder’...

Q: What effect do the following transactions have on the calculation of Young

What effect do the following transactions have on the calculation of Young Corporation’s current E&P? Assume that the starting point for the calculation is Young’s taxable income for the current year....

Q: Badger Corporation was incorporated in the current year. It reports an

Badger Corporation was incorporated in the current year. It reports an $8,000 NOL on its initial tax return. Badger distributes $2,500 to its shareholders. Is it possible for this distribution to be t...

Q: Does the timing of a distribution matter as to whether it is

Does the timing of a distribution matter as to whether it is taxed as a dividend or treated as a return of capital? Explain.

Q: Hickory Corporation owns a building with a $160,000 adjusted

Hickory Corporation owns a building with a $160,000 adjusted basis and a $120,000 FMV. Hickory’s E&P is $200,000. Should the corporation sell the building and distribute the sales proceeds to its shar...

Q: Walnut Corporation owns a building with a $120,000 adjusted

Walnut Corporation owns a building with a $120,000 adjusted basis and a $160,000 FMV. Walnut’s E&P is $200,000. Should the corporation sell the building and distribute the sales proceeds to its shareh...