Questions from General Taxation

Q: Castle and Dorabella formed an S corporation; Castle owns 75%

Castle and Dorabella formed an S corporation; Castle owns 75% of the outstanding shares, and Dorabella ow ns the rest. When the entity’s AAA balance is $1 million, it distributes an asset to each shar...

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

At the beginning of the year, Myrna Corporation (a calendar year taxpayer) holds E & P of $32,000. The corporation generates no additional E & P during the year. On December 31, the corporation distri...

Q: On January 1 of the current year, Rhondell Corporation holds accumulated

On January 1 of the current year, Rhondell Corporation holds accumulated E & P of $13,000. Current E & P for the year is $84,000, earned evenly through- out the year. Elizabeth and Jonathan ar...

Q: Carla was the owner of vacant land that she was holding for

Carla was the owner of vacant land that she was holding for investment. She paid $2 million for the land in 2013. Raymond was an investor in vacant land. He thought Carla’s land might be the site of a...

Q: Global Corporation distributed property with an $850,000 fair market

Global Corporation distributed property with an $850,000 fair market value and a $415,000 adjusted basis to Kang, one of its shareholders. The property was subject to a $230,000 mortgage, which Kang a...

Q: Fargo Corporation holds $5 million in accumulated E & P.

Fargo Corporation holds $5 million in accumulated E & P. It distributes to Leilei, one of its shareholders, land worth $310,000; basis of the land to Fargo is $260,000. Determine the Federal income ta...

Q: During the current year, Gnatcatcher, Inc. (E &

During the current year, Gnatcatcher, Inc. (E & P of $1 million), distributed $200,000 each to Brandi and Yuen in redemption of some of their Gnat- catcher stock. The two shareholders are not related;...

Q: Can a sole proprietor form as a single-member limited liability

Can a sole proprietor form as a single-member limited liability company (LLC)? If so, how would such an LLC be taxed?

Q: Assume in Problem 28 that Jane receives the 50 shares of Osprey

Assume in Problem 28 that Jane receives the 50 shares of Osprey Corporation stock in consideration for the appreciated property and for the provision of accounting services in organizing the corporati...

Q: Dove Corporation, a calendar year C corporation, had the following

Dove Corporation, a calendar year C corporation, had the following information for 2015: Net income per books (after-tax)………………………………………………… $386,250 Taxable income …………………………………………………………………………….120,...