Tammy Olsen has owned l00% of the common stock of Green Corporation (basis of $75,000) since the corporation's formation in 2008. In 2015, when Green had E & P of $320,000, the corporation distributed to Tammy a nontaxable dividend of 500 shares of preferred stock (value of $100,000 on date of distribution) on her common stock interest (value of $400,000 on date of distribution). In 2016, Tammy donated the 500 shares of preferred stock to her favorite charity, State University. Tammy deducted $100,000, the fa ir market value of the stock on the date of the gift, as a charitable contribution on her 2016 income tax return. Tammy's adjusted gross income for 2016 was $420,000. Six months after the contribution, Green Corporation redeemed the preferred stock from State University for $100,000. Upon audit of Tammy's 2016 return, the IRS disallowed the entire deduction for the gift to State University, asserting that the preferred stock was § 306 stock and that § 170(e)(l)(A) precluded a deduction for contributions of such stock. What is the proper tax treatment for Tammy's contribution of Green Corporation preferred stock? Partial list of research aids: Reg. § 1 170a-4(bXI). § 306(b)(4)
> The consolidated return Regulations employ the "SRLY" rules to limit the losses a parent can claim with respect to a newly acquired subsidiary. Explain the tax policy behind the SRLY rules. Describe how they affect the timing of loss deductions after an
> Mini Corporation brought a $7 million NOL carryforward into the Mucho Group of corporations that elected to file on a consolidated basis as of the beginning of this year. Combined results for the year generated $15 million taxable income, $2 million of w
> Oudine the process by which a consolidated group computes its Federal taxable income. Your description should match the approach taken in Exhibit 8.2.
> Ryce contributes non-depreciable property with an adjusted basis of $60,000 and a fair market value of $95,000 to the Montgomery Partnership in exchange for a one-half interest in profits and capital. In the next tax year, when the property's fair market
> Spinone Corporation directs its sole shareholder, James, to exchange all of his common stock valued at $200,000 (basis of $50,000) for $100,000 of common stock, $70,000 of preferred stock, and $30,000 in cash. In addition, Spinone directs its sole bondho
> The Parent consolidated group reports the following results for the tax year. a. What is the group's consolidated taxable income and consolidated tax liability' b. If the Parent group has consented to the relative taxable income method, how will the co
> Penguin LLC operates a large apparel store with several employees and substantial debt. Each LLC member is active in the business and receives compensation from the LLC. The LLC invests it5 excess cash in government and corporate bonds, blue chip stocks,
> LO.S Park Corporation distributes its shoe manufacturing line of business to the newly created ShoeBiz Corporation in a transaction qualifying as a '"Type D" spin-off reorganization. Before the distribution, Park is worth $4,000,000 and its E & P balance
> Blush Corporation owns long-term bonds (basis of $1.3 million) of its subsidiary, Brass Corporation, that were acquired at a discount. Upon liquidation of Brass pursuant to § 332, Blush receives a distribution of $1.5 million, the face amount of the bond
> The stock of Quail Corporation is held as follows: 85% by Pheasant Corporation and 15% by Gisela, an individual. Quail Corporation is liquidated in December of the current year pursuant to a plan adopted earlier in the year. At the time of its liquidatio
> Green Corporation's assets are valued at $920,000 after payment of all corporate debts, except for $134,000 of taxes payable on net gains it recognized on the liquidation. Bruno, an individual and the sole shareholder of Green, has a basis of $280,000 in
> On January 4, 2018, Martin Corporation acquires two properties from a shareholder solely in exchange for stock in a transaction that qualifies under § 351. The shareholder's basis, the fair market value, and the built-in gain (loss) of each p
> Whitney Corporation acquires Jessamine Corporation. Prior to the merger, Jessamine accumulated a $12,000,000 NOL. After the reorganization, Whitney generates $30,000,000 of taxable income. Whitney is subject to a marginal state and Federal tax rate of 25
> Velocity, Inc., a foreign corporation, earned $500,000 U.S.-source income from royalties that it collected, and $400,000 interest from it5 investment in U.S. Treasury bonds. Compute Velocity's U.S. income tax on these amounts.
> Parent and Child corporations have filed on a consolidated basis since the mid-1970s. The group reports the following amounts for the current tax year. What is the Parent group's net operating loss for the year that is available for carryforward?
> Citron enters into a “Type C" restructuring with Ecru. Ecru transfers $800,000 of its voting stock for Citron's $1.2 million asset5 (basis $600,000) and $400,000 liabilities. Citron retains one asset, land, which it distributes to its sole individual sha
> Indigo Corporation wants to transfer cash of S 150,000 or property worth $150,000 to one of its shareholders, Linda, in a redemption transaction that will be treated as a qualifying stock redemption. If Indigo distributes property, the corporation will c
> Parent Corporation's current-year taxable income included S 100,000 net income from operations and a $10,000 net long-term capital gain. Parent also made a $5,000 charitable contribution. SubCo generated $45,000 income from operations and incurred a $2,0
> Put owned all of the stock of Call when the two corporations were formed a decade ago. The group immediately elected to file on a consolidated basis. Now Cali's management team has purchased the company from the parent and intends to carry on and expand
> Jokan contributes a non-depreciable asset to the Mahali LLC in exchange for a one-fourth (25%) interest in the capital, profits, and losses of the LLC. The asset has an adjusted tax basis to Jokan and the LLC of $60,000 and a fair market value and§ 704(b
> Clifton Corporation acquired all of the outstanding Gillion stock on January 1, year 1, for $2,400,000. The parties immediately elected to file consolidated Federal income tax returns. Gillion reported a year 1 taxable loss of $250,000, but it generated
> A partnership in which a parent transferred a 40% interest by gift to a child generated a profit of $130,000. Capital is a material income-producing factor. The parent performed services valued at $44,000, while the child performed no services. How much
> Berdine has a basis of $32,000 in her partnership interest and receives land with an adjusted basis to the partnership of $78,000 in termination of her interest. (The partnership holds no hot assets.) a. Under the proportionate liquidating distribution r
> Dusan is a member of the Tonda LLC, and all members have equal interests in capital and profits. The LLC has made an optional adjustment-to-basis election. Dusan's interest is sold to Adele for $35,000. The balance sheet of the LLC immediately before the
> The Lexington Partnership has a depreciable business asset (personal property) that it originally purchased for $60,000. The asset now has an adjusted basis of $36,000 and a market value of $70,000. The partnership has no other potential hot assets. Ambr
> On December 31, Yong sells his 100/o interest in Catatvissa LLC to Mei for $17,500. Yong is a calendar year taxpayer. Catawissa owns no hot assets, and its tax year ends on September 30. On October 1, Yong's basis in the LLC interest was $11 ,000. His sh
> Corn ell purchased a 15-year, $25,000 bond from Fulvous Corporation for $20,000 eight years ago. Interest of $2,300 has been amortized over the eight years and added to Cornell's bond basis. In the current year, Fulvous is acquired by Glaucous in a "Type
> By the end of 2017, Klein, a domestic corporation, had accumulated $10 million in cash from the overseas operations of its Liberia subsidiary. Klein made no distributions of these accumulated funds during 2017. Compute the one-time transition tax liabili
> The Whitewater LLP is equally owned by three partners and shows the following balance sheet at the end of the current tax year. Partner Petula is an active (i.e., "general") partner retiring from the service-oriented partnership. She receives $60,000 c
> Wylie receives cash of $145,000 in liquidation of his partnership interest, in which he has a basis of $110,000. The partnership owns no hot assets and continues in existence. After following all of the classification requirements of§ 736, $100,000 of th
> Ten years ago, Dudley contributed land to the Prosperity LLC. His basis in the land was $100,000. The fa ir market value at the contribution date was $115,000. This year, when the property's value was $200,000, the LLC distributed that property to partne
> Matulis, Inc., a calendar year C corporation, owns a single asset with a basis of $325,000 and a fair market value of $800,000. Matulis holds a positive E & P balance. The entity elects S corporation status for 2019 and then sells the asset. Compute the
> When Magdalena's outside basis is $58,000, she receives a liquidating distribution of S 15,000 cash and a proportionate share of inventory having a partnership basis of $20,000 and a fair market value of S24,000. The distribution results in a liquidation
> Lola owns a one-half interest in the Lenax LLC. Her basis in this ownership interest is $22,000 at the end of the year, after accounting for the calendar year LLC's current operations. On that date, the LLC distributes $25,000 cash to Lola in a proportio
> Olinto Corp., an accrual basis calendar year C corporation, had no corporate shareholders when it liquidated in year 12. In cancellation of all their Olinto Corp. stock, each Olinto Corp. shareholder received in year 12 a liquidating distribution of $12,
> Generally, in a direct distribution of assets to the shareholders that results in a complete corporate liquidation: a. There is no taxable event. b. The corporation recognizes no gain or loss because it transfers the assets to the shareholders at the cor
> A corporation was completely liquidated and dissolved during year 14. The filing fees, professional fees, and other expenditures incurred in connection with the liquidation and dissolution are: a. Deductible in full by the dissolved corporation. b. Deduc
> Determine whether the following transactions are taxable. If a transaction is not taxable, indicate what type of reorganization is effected, if any. a. Alpha Corporation owns assets valued at $400,000 and liabilities of $100,000. Beta Corporation transfe
> Krol Corp. distributed marketable securities in redemption of its stock in a complete liquidation. On the date of distribution, these securities had a basis of $100,000 and a fair market value of $150,000. What gain does Krol have as a result of the dist
> On December 31 of the current year, after receipt of his share of partnership income, Fox sold his interest in a limited partnership for $50,000 cash plus relief of all liabilities. On that date, the adjusted basis of Fox's partnership interest was $60,0
> Desi's adjusted basis of her partnership interest was $40,000 immediately before she received a distribution in full liquidation of her Makris partnership interest. The distribution consisted of $25,000 in cash and land with a fair market value of $30,00
> Gearty's adjusted basis in Worthington Company, a partnership, was $ 18,000 at the time Gearty received the following non-liquidating distributions of partnership property: What is Gearty's tax basis in the land received from the partnership? a. SO b.
> Which of the following statements is not true? a. Affiliated corporations that file consolidated returns can take a l00% dividends received deduction. b. The dividends received deduction for a small investment in an unrelated corporation is 500A.. c. The
> Assume the same facts as in Problems 46 to 49. Assume also the following: (I) Amy's ordinary business income from AM is qualified business income; (2) Amy's taxable income excluding capital gains is $500,000; and (3) Amy has no income from REITs, publicl
> Assume the same facts as Problem 31, except that TAV distributes a $50,000 (FMV) interest in the land and $50,000 (FMV) of accounts receivable to Vincent and $25,000 of cash and $25,000 (FMV) of accounts receivable each to Anita and Tyler. In general ter
> Vincent is a 50% partner in the TAV Partnership. He became a partner three years ago when he contributed land with a value of $60,000 and a basis of $30,000 (current value is $100,000). Tyler and Anita each contributed $30,000 cash for a 25% interest. Vi
> Beach Corporation, a seaside restaurant, is owned by 20 unrelated shareholders. This year, Beach made the national news for polluting the surrounding beach and ocean with garbage; it was fined $200,000. Beach fired its chief executives and appointed a ne
> The Rho Corporation was incorporated eight years ago by Tyee and Danette. Tyee received 5,000 shares of common stock for his $100,000 contribution, and Danette received 10,000 shares of con1mon stock for her $200,000 contribution. Five years ago, both Ty
> Certain Corporation is the parent entity in a Federal consolidated group for corporate income tax purposes. When its wholly owned subsidiary, Likely, Inc., reports an operating profit, Certain's basis in the Likely stock increases, as does the balance in
> Suppose that X has the probability distribution fX(x) = 1, 1 ≤ x ≤ 2 Determine the probability distribution of the random variable Y = eX.
> The velocity of a particle in a gas is a random variable V with probability distribution fV (v) = av2e−bv , v > 0 where b is a constant that depends on the temperature of the gas and the mass of the particle. a. Determine the value of the constant a. b.
> A random variable X has the probability distribution fX(x) = e−x , x ≥ 0 Determine the probability distribution for the following: a. Y = X2 b. Y = X1/2 c. Y = ln X
> Suppose that X is a continuous random variable with probability distribution fX(x) = x /18 , 0 ≤ x ≤ 6 a. Determine the probability distribution of the random variable Y = 2X + 10. b. Determine the expected value of Y.
> Suppose that X is a random variable with probability distribution fX(x) = 1∕4, x = 1, 2, 3, 4 Determine the probability distribution of Y = 2X + 1.
> The probability density function of the net weight in pounds of a packaged chemical herbicide is f (x) = 2.0 for 49.75 < x < 50.25 pounds. a. Determine the probability that a package weighs more than 50 pounds. b. How much chemical is contained in 90% of
> Suppose that f (x) = 1.5x2 for −1 < x < 1. Determine the following: a. P(0 < X) b. P(0.5 < X) c. P(−0.5 ≤ X ≤ 0.5) d. P(X < −2) e. P(X < 0 or X > −0.5) f. x such that P(x < X) = 0.05.
> Suppose that f (x) = x∕8 for 3 < x < 5. Determine the following probabilities: a. P(X < 4) b. P(X > 3.5) c. P(4 < X < 5) d. P(X < 4.5) e. P(X < 3.5 or X > 4.5)
> Suppose that f (x) = 0.5 cos x for −π∕2 < x < π∕2. Determine the following: a. P(X < 0) b. P(X < −π∕4) c. P(−π∕4 < X < π∕4) d. P(X > −π∕4) e. x such that P(X < x) = 0.95
> The diameter of a particle of contamination (in micrometers) is modeled with the probability density function f (x) = 2∕x3 for x > 1. Determine the following: a. P(X < 2) b. P(X > 5) c. P(4 < X < 8) d. P(X < 4 or X > 8) e. x such that P(X < x) = 0.95
> Suppose that Xi has a normal distribution with mean μi and variance σ2i , i = 1, 2. Let X1 and X2 be independent. a. Find the moment-generating function of Y = X1 + X2. b. What is the distribution of the random variable Y?
> The distribution of X is approximated with a triangular probability density function f (x) = 0.0025x − 0.075 for 30 < x < 50 and f (x) = −0.0025x + 0.175 for 50 < x < 70. Determine the following: a. P(X ≤ 40) b. P(40 < X ≤ 60) c. Value x exceeded with p
> Suppose that f (x) = e−x for 0 < x. Determine the following: a. P(1 < X) b. P(1 < X < 2.5) c. P(X = 3) d. P(X < 4) e. P(3 ≤ X) f. x such that P(x < X) = 0.10 g. x such that P(X ≤ x) = 0.10
> Determine the value of c that makes the function f (x, y) = ce−2x−3y a joint probability density function over the range 0 < x and x < y. Determine the following: a. P(X < 1, Y < 2) b. P(1 < X < 2) c. P(Y > 3) d. P(X < 2, Y < 2) e. E(X) f. E(Y) g. Mar
> Determine the value of c such that the function f (x, y) = cxy for 0 < x < 3 and 0 < y < 3 satisfies the properties of a joint probability density function. Determine the following: a. P(X < 2, Y < 3) b. P(X < 2.5) c. P(1 < Y < 2.5) d. P(X > 1.8, 1 < Y
> An article in Electric Power Systems Research [“Modeling Real-Time Balancing Power Demands in Wind Power Systems Using Stochastic Differential Equations” (2010, Vol. 80(8), pp. 966–974)] considered a
> An engineering statistics class has 40 students; 60% are electrical engineering majors, 10% are industrial engineering majors, and 30% are mechanical engineering majors. A sample of four students is selected randomly without replacement for a project tea
> An article in the Journal of Database Management [“Experimental Study of a Self-Tuning Algorithm for DBMS Buffer Pools” (2005, Vol. 16, pp. 1–20)] provided the workload used in the TPC-C OLTP (Transaction Processing Performance Council’s Version C On-Lin
> A manufacturing company employs two devices to inspect output for quality control purposes. The first device is able to accurately detect 99.3% of the defective items it receives, whereas the second is able to do so in 99.7% of the cases. Assume that fou
> A small-business Web site contains 100 pages and 60%, 30%, and 10% of the pages contain low, moderate, and high graphic content, respectively. A sample of four pages is selected randomly without replacement, and X and Y denote the number of pages in the
> In the transmission of digital information, the probability that a bit has high, moderate, and low distortion is 0.01, 0.04, and 0.95, respectively. Suppose that three bits are transmitted and that the amount of distortion of each bit is assumed to be in
> Let X1, X2,…, Xr be independent exponential random variables with parameter λ. a. Find the moment-generating function of Y = X1 + X2 + …+Xr. b. What is the distribution of the random variable Y?
> Show that the following function satisfies the properties of a joint probability mass function. Determine the following: a. P(X b. P(X c. P(Y d. P(X > 0.25, Y e. E(X), E(Y), V(X), V(Y) f. Marginal probability distribution of X
> Show that the following function satisfies the properties of a joint probability mass function. Determine the following: a. P(X b. P(X c. P(Y d. P(X > 1.8, Y > 4.7) e. E(X), E(Y), V(X), V(Y) f. Marginal probability distribution of X
> Solve the following
> F(x) = 1 − e−2x x > 0
> Determine the cumulative distribution function for the distribution in Exercise 4.1.7. Use the cumulative distribution function to determine the probability that a length exceeds 2.7 meters.
> An article in IEEE Journal on Selected Areas in Communications [“Impulse Response Modeling of Indoor Radio Propagation Channels” (1993, Vol. 11(7), pp. 967–978)] indicated that the successful design of indoor communication systems requires characterizati
> Suppose that the construction of a solar power station is initiated. The project’s completion time has not been set due to uncertainties in financial resources. The proportion of completion within one year has a beta distribution with parameters α = 1 an
> An airline makes 200 reservations for a flight that holds 185 passengers. The probability that a passenger arrives for the flight is 0.9, and the passengers are assumed to be independent. a. Approximate the probability that all the passengers who arrive
> A square inch of carpeting contains 50 carpet fibers. The probability of a damaged fiber is 0.0001. Assume that the damaged fibers occur independently. a. Approximate the probability of one or more damaged fibers in one square yard of carpeting. b. Appro
> The diameter of the dot produced by a printer is normally distributed with a mean diameter of 0.002 inch. a. Suppose that the specifications require the dot diameter to be between 0.0014 and 0.0026 inch. If the probability that a dot meets specifications
> A random variable X has the gamma distribution a. Show that the moment-generating function for t b. Find the mean and variance of X.
> The waiting time for service at a hospital emergency department follows an exponential distribution with a mean of three hours. Determine the following: a. Waiting time is greater than four hours b. Waiting time is greater than six hours given that you h
> Asbestos fibers in a dust sample are identified by an electron microscope after sample preparation. Suppose that the number of fibers is a Poisson random variable and the mean number of fibers per square centimeter of surface dust is 100. A sample of 800
> Suppose that X has a lognormal distribution and that the mean and variance of X are 50 and 4000, respectively. Determine the following: a. Parameters θ and ω2 of the lognormal distribution b. Probability that X is less than 150
> Suppose that X has a lognormal distribution with parameters θ = 0 and ω2 = 4. Determine the following: a. P(10 < X < 50) b. Value for x such that P(X < x) = 0.05 c. Mean and variance of X
> Suppose that f (x) = 0.5x − 1 for 2 < x < 4. Determine the following: a. P(X < 2.5) b. P(X > 3) c. P(2.5 < X < 3.5) d. Determine the cumulative distribution function of therandom variable. e. Determine the mean and variance of the random variable.
> The time between calls is exponentially distributed with a mean time between calls of 10 minutes. a. What is the probability that the time until the first call is less than five minutes? b. What is the probability that the time until the first call is be
> The life of a recirculating pump follows a Weibull distribution with parameters β = 2 and δ = 700 hours. Determine for parts (a) and (b): a. Mean life of a pump b. Variance of the life of a pump c. What is the probability that a pump will last longer tha
> The size of silver particles in a photographic emulsion is known to have a log normal distribution with a mean of 0.001mm and a standard deviation of 0.002 mm. a. Determine the parameter values for the lognormal distribution. b. What is the probability o
> When a bus service reduces fares, a particular trip from New York City to Albany, New York, is very popular. A small bus can carry four passengers. The time between calls for tickets is exponentially distributed with a mean of 30 minutes. Assume that eac
> The time to failure (in hours) for a laser in a cytometry machine is modeled by an exponential distribution with λ = 0.00004. What is the probability that the time until failure is a. At least 20,000 hours? b. At most 30,000 hours? c. Between 20,000 and
> The percentage of people exposed to a bacteria who become ill is 20%. Assume that people are independent. Assume that 1000 people are exposed to the bacteria. Approximate each of the following: a. Probability that more than 225 become ill b. Probability
> An article in Electronic Journal of Applied Statistical Analysis [“Survival Analysis of Acute Myocardial Infarction Patients Using Non-Parametric and Parametric Approaches” (2009, Vol. 2(1), pp. 22–36)] described the use of aWeibull distribution to model
> An article in Electric Power Systems Research [“On the Self-Scheduling of a Power Producer in Uncertain Trading Environments” (2008, Vol. 78(3), pp. 311–317)] considered a self-scheduling approach for a power producer. In addition to price and forced out
> An article in Journal of Theoretical Biology [“Computer Model of Growth Cone Behavior and Neuronal Morphogenesis” (1995, Vol. 174(4), pp. 381–389)] developed a model for neuronal morphogenesis in which neuronal growth cones have a significant function in
> Among homeowners in a metropolitan area, 25% recycle paper each week. A waste management company services 10,000 homeowners (assumed independent). Approximate the following probabilities: a. More than 2600 recycle paper in a week b. Between 2400 and 2600
> Provide approximate sketches for beta probability density functions with the following parameters. Comment on any symmetries and show any peaks in the probability density functions in the sketches. a. α = β < 1 b. α = β = 1 c. α = β > 1
> Consider the regional right ventricle transverse wall motion in patients with pulmonary hypertension (PH). The right-ventricle ejection fraction (EF) is approximately normally distributed with a standard deviation of 12 for PH subjects, and with mean and
> The intensity (mW/mm2) of a laser beam on a surface theoretically follows a bivariate normal distribution with maximum intensity at the center, equal variance σ in the x and y directions, and zero covariance. There are several definitions for the width o
