Questions from Federal Taxation

Q: Of the 9,500 shares of Favor Corporation stock outstanding,

Of the 9,500 shares of Favor Corporation stock outstanding, Olsen owns 6,100 shares. Unrelated parties own the remaining shares. To bolster its stock price, Favor plans to reduce the total number of s...

Q: Unrelated parties Amy, Beth, Carla, and Delta Corporation each

Unrelated parties Amy, Beth, Carla, and Delta Corporation each own 25 of the 100 outstanding shares of Axle Corporation stock. In a transaction that qualifies as a partial liquidation, Axle distribute...

Q: John died on March 3, 2017. His gross estate of

John died on March 3, 2017. His gross estate of $8.25 million includes First Corporation stock (400 of the 1,000 outstanding shares) worth $5 million or $12,500 per share ($5,000,000/400). This FMV am...

Q: What are the advantages and disadvantages of using debt in a firm’s

What are the advantages and disadvantages of using debt in a firm’s capital structure?

Q: White Corporation has 100 shares of stock outstanding. Ann owns 40

White Corporation has 100 shares of stock outstanding. Ann owns 40 of these shares, and unrelated individuals own the remaining 60 shares. White redeems 30 of Ann’s shares for $30,000. In the year of...

Q: Alan, Barbara, and Dave are unrelated. Each has owned

Alan, Barbara, and Dave are unrelated. Each has owned 100 shares of Time Corporation stock for five years and each has a $60,000 basis in those shares. Time’s E&P is $240,000. Time redeems all 100 of...

Q: Andrew, Bea, Carl, and Carl, Jr. (

Andrew, Bea, Carl, and Carl, Jr. (Carl’s son), and Tetra Corporation own all of the single class of Excel Corporation stock as follows: Andrew, Bea, and Carl are unrelated. Bea owns...

Q: Alice, Bob, Carol, the ABC Partnership, Franklin Corporation

Alice, Bob, Carol, the ABC Partnership, Franklin Corporation, and the Gleason Family Trust own shares of Holston Corporation’s single class of stock as follows: The Holston sharehol...

Q: Bailey is one of four equal unrelated shareholders of Checker Corporation.

Bailey is one of four equal unrelated shareholders of Checker Corporation. Bailey has held Checker stock for four years and has a basis in her stock of $40,000. Checker has $280,000 of current and acc...

Q: Fran owns all 100 shares of Star Corporation stock. Her stock

Fran owns all 100 shares of Star Corporation stock. Her stock basis is $60,000. On December 1 of the current year, Star distributes 50 shares of preferred stock to Fran in a nontaxable distribution. I...