Questions from Federal Taxation

Q: Corporate shareholders typically prefer dividend treatment on a stock redemption. Why

Corporate shareholders typically prefer dividend treatment on a stock redemption. Why?

Q: Suzanne owns interests in a bagel shop, a lawn and garden

Suzanne owns interests in a bagel shop, a lawn and garden store, and a convenience store. Several full-time employees work at each of the enterprises. As of the end of November of the current year, Su...

Q: At the beginning of the year, Penguin Corporation (a calendar

At the beginning of the year, Penguin Corporation (a calendar year taxpayer) has accumulated E & P of $55,000. During the year, Penguin incurs a $36,000 loss from operations that accrues ratably. On O...

Q: Cerulean Corporation has two equal shareholders, Eloise and Olivia. Eloise

Cerulean Corporation has two equal shareholders, Eloise and Olivia. Eloise acquired her Cerulean stock three years ago by transferring property worth $700,000, basis of $300,000, for 70 shares of the...

Q: Iris Corporation owns 30% of Fresia Corporation’s stock. On November

Iris Corporation owns 30% of Fresia Corporation’s stock. On November 15, Fresia Corporation, with current E & P of $320,000, distributes land (fair market value of $100,000; basis of $160,000) to Iris...

Q: Anna received tangible personal property with a fair market value of $

Anna received tangible personal property with a fair market value of $65,000 as a gift in 2015. The donor had purchased the property for $77,000 and had taken $77,000 of depreciation. Anna used the pr...

Q: Parrot Corporation is a closely held company with accumulated E & P

Parrot Corporation is a closely held company with accumulated E & P of $300,000 and current E & P of $350,000. Tom and Jerry are brothers; each owns a 50% share in Parrot, and they share management re...

Q: Jacob Corcoran bought 10,000 shares of Grebe Corporation stock two

Jacob Corcoran bought 10,000 shares of Grebe Corporation stock two years ago for $24,000. Last year, Jacob received a nontaxable stock dividend of 2,000 shares in Grebe Corporation. In the current tax...

Q: Employees at the Hobby Hut requested that the company provide assistance in

Employees at the Hobby Hut requested that the company provide assistance in locating professional-quality child care services during business hours. The Hut, a C corporation, contracts with the local...

Q: Louis owns three pieces of land with an adjusted basis as follows

Louis owns three pieces of land with an adjusted basis as follows: parcel A, $75,000; parcel B, $125,000; and parcel C, $175,000. Louis sells parcel A to his uncle for $50,000, parcel B to his partner...