Questions from General Taxation

Q: Rosalie owns 50% of the outstanding stock of Salmon Corporation.

Rosalie owns 50% of the outstanding stock of Salmon Corporation. In a qualifying stock redemption, Salmon distributes $80,000 to Rosalie in exchange for one-half of her shares, which have a basis of $...

Q: On December 1, 2013, Lavender Manufacturing Company (a corporation

On December 1, 2013, Lavender Manufacturing Company (a corporation) purchased another company’s assets, including a patent. The patent was used in Lavender’s manufacturing operations; $49,500 was allo...

Q: How would your answer to parts (a) and (b

How would your answer to parts (a) and (b) of Problem 36 differ if Julio were a corporate shareholder (in the 34% tax bracket) rather than an individual shareholder and the stock ownership in Gray Cor...

Q: Silver Corporation has 2,000 shares of common stock outstanding.

Silver Corporation has 2,000 shares of common stock outstanding. Howard owns 600 shares, Howard’s grandfather owns 300 shares, Howard’s mother owns 300 shares, and Howard’s son owns 100 shares. In add...

Q: Shonda owns 1,000 of the 1,500 shares outstanding

Shonda owns 1,000 of the 1,500 shares outstanding in Rook Corporation (E & P of $1 million). Shonda paid $50 per share for the stock seven years ago. The remaining stock in Rook is owned by unrelated...

Q: Broadbill Corporation (E & P $650,000) has

Broadbill Corporation (E & P $650,000) has 1,000 shares of common stock outstanding. The shares are owned by the following individuals: Tammy, 300 shares; Yvette, 400 shares; and Jeremy, 300 shares. E...

Q: For the last 11 years, Lime Corporation has owned and operated

For the last 11 years, Lime Corporation has owned and operated four different trades or businesses. Lime also owns stock in several corporations that it purchased for investment purposes. The stock of...

Q: Compare the tax treatment of liquidating and redemption distributions in terms of

Compare the tax treatment of liquidating and redemption distributions in terms of the following. a. Recognition of gain or loss by the shareholder. b. Basis of property received by the shareholder....

Q: Dove Corporation (E & P of $800,000)

Dove Corporation (E & P of $800,000) has 1,000 shares of stock outstanding. The shares are owned as follows: Julia, 600 shares; Maxine (Julia’s sister), 300 shares; and Janine (Julia’s daughter), 100...

Q: Kaiwan, Inc., a calendar year S corporation, is partly

Kaiwan, Inc., a calendar year S corporation, is partly owned by Sharrod, whose beginning stock basis is $32,000. During the year, Sharrod’s share of a Kaiwan long-term capital gain (LTCG) is $5,000, a...