1. In 2022, a corporation earns $65,000 from its business operations and has $10,000 of

dividend income. It donates $12,000 to charity. Show how you determine taxable

income.

2. Connie contributes a machine (basis $3,000, value $5,000) to her controlled

corporation in exchange for stock worth $4,200 and $800 in cash. (a) How much gain

will she recognize? (b) What's her basis in her stock? (c) What's the corp's basis in the

machine?

3. Carl has a basis of $7,500 in his stock. The corporation has $1,500 of E&P. Carl

receives a distribution of S10,000. (a) How much dividend income does he have? (b)

How much capital gain does he have, if any? (c) What's his new basis in his stock?