Questions from Individual Taxation

Q: Spartan Corporation redeemed 25% of its shares for $2,

Spartan Corporation redeemed 25% of its shares for $2,000 on July 1 of this year, in a transaction that qualified as an exchange under §302(a). Spartan’s accumulated E&P at the beginning of the year w...

Q: Cadillac Square Corporation determined that $1,000,000 of

Cadillac Square Corporation determined that $1,000,000 of its domestic production activities deduction on its current year tax return was uncertain, but that it was more likely than not to be sustaine...

Q: Bonnie and Clyde are the only two shareholders in Getaway Corporation.

Bonnie and Clyde are the only two shareholders in Getaway Corporation. Bonnie owns 60 shares with a basis of $3,000, and Clyde owns the remaining 40 shares with a basis of $12,000. At year end, Getawa...

Q: Aggie Corporation made a distribution of $500,000 to Rusty

Aggie Corporation made a distribution of $500,000 to Rusty Cedar in partial liquidation of the company on December 31 of this year. Rusty, an individual, owns 100% of Aggie Corporation. The distributi...

Q: Jayhawk Company reports current E&P of $300,000

Jayhawk Company reports current E&P of $300,000 and accumulated E&P of negative $200,000. Jayhawk distributed $400,000 to its sole shareholder, Christine Rock, on the last day of the year. Christine’s...

Q: This year Sooner Company reports current E&P of negative $

This year Sooner Company reports current E&P of negative $300,000. Its accumulated E&P at the beginning of the year was $200,000. Sooner distributed $400,000 to its sole shareholder, Boomer Wells, on...

Q: Rex and Felix are the sole shareholders of the Dogs and Cats

Rex and Felix are the sole shareholders of the Dogs and Cats Corporation (DCC). After several years of operations using the accrual method, they decided to liquidate the corporation and operate the bu...

Q: In general terms, how are C corporations different from and similar

In general terms, how are C corporations different from and similar to S corporations?

Q: Explain why a partnership might not want to make a §754

Explain why a partnership might not want to make a §754 election to allow special basis adjustments.

Q: At the end of last year, Lisa, a 35%

At the end of last year, Lisa, a 35% partner in the five-person LAMEC Partnership, has an outside basis of $60,000 including her $30,000 share of LAMEC debt. On January 1 of the current year, Lisa sel...