Questions from Federal Taxation

Q: Mark transfers all the property of his sole proprietorship to newly formed

Mark transfers all the property of his sole proprietorship to newly formed Utah Corporation in exchange for all the Utah stock. Mark has claimed depreciation on some of the property. Under what circum...

Q: What is a constructive dividend? Under what circumstances is the IRS

What is a constructive dividend? Under what circumstances is the IRS likely to argue that a constructive dividend has been paid?

Q: Why are stock dividends generally nontaxable? Under what circumstances are stock

Why are stock dividends generally nontaxable? Under what circumstances are stock dividends taxable?

Q: Neil purchased land from Spring Harbor, his 100%-owned corporation

Neil purchased land from Spring Harbor, his 100%-owned corporation, for $275,000. The corporation purchased the land three years ago for $300,000. Similar tracts of land located nearby have sold for $...

Q: Price Corporation has 100 shares of common stock outstanding. Price repurchased

Price Corporation has 100 shares of common stock outstanding. Price repurchased all of Penny’s 30 shares for $35,000 cash during the current year. Three years ago, Penny received the shares as a gift...

Q: George owns all 100 shares of Gumby’s Pizza Corporation. The shares

George owns all 100 shares of Gumby’s Pizza Corporation. The shares are worth $200,000, while George’s basis is only $70,000. Mary and George have reached a tentative agreement under which George will...

Q: Marsha receives a $10,000 cash distribution from Dye Corporation

Marsha receives a $10,000 cash distribution from Dye Corporation in April of the current year. At the beginning of the year, Dye has $4,000 of accumulated E&P and $8,000 of current E&P. Dye also distr...

Q: George owns 100 of the 1,000 outstanding shares of Polar

George owns 100 of the 1,000 outstanding shares of Polar Corporation common stock. Under the Sec. 318 family attribution rules, to which of the following individuals will ownership of George’s stock b...

Q: Jana owns all 100 shares of Stone Corporation stock having a $

Jana owns all 100 shares of Stone Corporation stock having a $1 million FMV. Her basis in the stock is $400,000. Stone’s E&P balance is $600,000. Michael would like to purchase the stock but wants onl...

Q: Alabre Corporation has 150,000 shares of common stock outstanding and

Alabre Corporation has 150,000 shares of common stock outstanding and pays quarterly dividends of $0.15 per share. At the beginning of the current year, the balance in its accumulated E&P account is $...