4 Jasper Junction Corporation (JC) is an accrual basis, calendar year entity that was created by Choo, Iris, and Nolan in 20X1 JJC furnishes the original incorporation agreement The shareholders' bases in the assets contributed are as follows Cash $150 000 Equipment $245 000 Inventory $380,000 Land and Building $375,000 017 The first five years of business have been lean years Nolan had to loan the corporation $75,000 to ensure that JJC had enough cash to pay its bills and its Accumulated Earnings and Profits only amounts to $23,000 at the end of 20X5 JUC has its first year of substantial income in 20X6 It also sells some of its land for $100 000 cash, but the sale results in a capital loss The Board of Directors decides to pay $250,000 in dividends to its shareholders This is in addition to the $3,500 of interest it pays on the bonds and the $1 500 it pays to Nolan on the money he loaned JJC The income and expenses of JJC for 20x6 taxable income, and current E P are provided in the Table below Corporate Agreement Taxable Current Income ERP Amount Income Taxable income Sales COGS Dividends ( 5x) Hund Bond Interest Expenses Capital loss Interest Expense Operating Expenses Key Life Insurance Premium Taxable income before Special Deductions Charitable contributions Dividend leceivable Deduction Taxable income Federal Income Tax Current SP 176,500 412,000 412,000 150 000 (150 000) 133,800 133,000 1,000 1,000 12,935 (32,935) 5,000 (5,000) 120,000 (120,000) 6,000 (6,000) 270,000 30,000 (27,000) (3,600) (66,500 66,500 176,500 37,065 (2 065) 165,000 Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal tax consequences of JJC's corporate distributions (Decreases should be entered with a minus sign ) Shareholder Ownership Percentage 1 33 2 Chao 1 Answer is complete but not entirely correct eginning Increases Ending Taxable Distributions Basis in Basis in Stock (Decreases Stock (Dividends Capital Oain) $ 38,333 $ 7,0064 $375,000 5 Dividends $8 333 6 Capital gans $ 10,978 $383,3339 $ 7,668 10 3375,666 11 Dividends $33333 12 Capital $10 078 gans $ 3,333 15 $ 7,667 16 $375,667 17 Dividends 5 83,333 to Capital $ 10,978 Iris 7 33 3 Nolan 13 3414 CORPORATE AGREEMENT Jasper Junction Corporation This corporation agreement (the Agreement ) made and entered into this 6 day of January, 20X1 (the Execution Date ) AMONGST Chao of 693 Feather Street, Crane, North Dakota, 58585 Iris of 459 Wing Street, Crane, North Dakota, 58585 Nolan of 4455 Nest Street, Crane, North Dakota, 58585 Individually the Shareholder and collectively the Shareholders BACKGROUND The Shareholders wish to associate themselves as owners in the business The terms and conditions of this Agreement set out the terms and conditions as to how they will be Shareholders The firm name of the Corporation will be JASPER JUNCTION CORPORATION It will also be known as JJC and referred to in the remainder of this document as JJC Purpose The purpose of JC will be MANUFACTURING Place of Business The principal location of the business of JJC will be at 9322 Flight Avenue, Crane, North Dakota, 58585 until such time that the corporation Board of Directors designates a different location IN CONSIDERATION OF and as a condition of the Shareholders entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows Formation By this Agreement the Shareholders enter into a corporation in accordance with the laws of the State of North Dakota The rights and obligations of the Shareholders will be as stated in the applicable legislation of the State of North Dakota (the Act ), except as otherwise provided here Authorized common shares of JJC are 1 million The par value of each share of common stock will be $100 00 and its fair value will vary based on the value of JJC Each share of common stock will have the rights of one vote at shareholder meetings Nonvoting stock is authorized to be issued with not more than 500,000 shares permissible Common stock will be issued to the shareholders based on the net fair value contributed to the corporation Authorized preferred shares are 5,000 with a par value of $1,000 00 per share No preferred shares will be issued at the time of incorporation Bonds in valuation units of $10,000 may be issued Governance The first shareholder meeting shall take place the first day of February, 20X1 and thereafter annually on the first day of February Written minutes of the meetings must be available for shareholder review A Board of Directors shall be established by a vote of the shareholders The Board of Directors will appoint the officers and review their performance annually Changes to the incorporation agreement must be approved by a 60 shareholder vote based on common stock voting rights Distributions Subject to state law, the Board of Directors will declare dividends based on ownership as of a date the Board selects, and payment of the dividends must be within 30 days of such date Distributions that would impair the manufacturing operations are not permitted Dividends on common stock are not cumulative Shareholders can force distributions by a 60 vote when there are excess liquid assets that have no valid business purpose for their accumulation Capitalization Initial capitalization is provided by the initial Shareholders of Nolan, Chao and Iris Each of the Shareholders has contributed to the capital of JJC in the form of cash or property in agreed upon value for the stated shares of stock, as follows Shareholder Contribution Description Common Stock Chao 350 Iris 400 $150,000 CASH and EQUIPMENT valued at $320,000 There is a $120,000 recourse loan on the equipment INVENTORY valued at $500,000 No loans are attached to this asset LAND and BUILDING valued at $650,000 with a $400,000 nonrecourse mortgage Nolan 250 At time of incorporation, Iris will receive 10 bonds ($100,000) as partial consideration for her inventory contribution Jasper Junction Corporation (JJC) is an accrual basis, calendar year entity that was created by Chao, Iris, and Nolan in 20X1 JJC furnishes the original incorporation agreement The shareholders' bases in the assets contributed are as follows Cash $150,000 Equipment $245,000 Inventory $380,000 Land and Building $375,000 The first five years of business have been lean years Nolan had to loan the corporation $75,000 to ensure that JJC had enough cash to pay its bills and its Accumulated Earnings and Profits only amounts to $23,000 at the end of 20x5 JJC has its first year of substantial income in 20X6 It also sells some of its land for $100,000 cash, but the sale results in a capital loss The Board of Directors decides to pay $250,000 in dividends to its shareholders This is in addition to the $3 500 of interest it pays on the bonds and the $1 500 it pays to Nolon on the money he loaned JJC The income and expenses of JJC for 20X6, taxable income and current E P are provided in the Table below Corporate Agteement Taxable Current Amount Income ERP Incone Taxable Income 176,500 Sales 412,000 412,000 COGS 150,000 (150, eee) Dividends (oun 5) 133,000 133,000 Muni Bond Interest 1,000 1,000 Expenses Capital loss 32,935 (32,935) Interest Expense 5,000 (5,000) Operating Expenses 120,000 (120,000) Key Life Insurance Premius 6,000 (6,000) Taxable income before Special Deductions 270,000 Charitable Contributions 30,000 (27,000) (3 000) Dividend Receivable Deduction (66,580) 66,500 Taxable income 176,500 Federal Income Tax 37,065 (37,865) Current ERP 165,000 Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal tax consequences of JJC's corporate distributions (Decreases should be entered with a minus sign ) Shareholder Ownership Percentage Chao 1 33 2 Beginning Ending Increases or Taxablo Distributions Basis in (Decreases) Basis in Stock (Dividends Capital Gains) Stock $ 38,3333 $ 7 6664 $ 375,666 5 Dividends $ 8,333 6 Capital gains $ 10,978 $ 383, 3339 $ 7,666 10 $ 375,666 11 Dividends $ 83,333 12 Capital gains $ 10,978 $ 383,333 15 $ 7,657 16 S 375,667 17 Dividends $ 83,333 18 Capital gains $ 10,978 Ins 7 33 8 Nolan 13 34 14 corporate agreement pdf on com Media Connect Production bne Roger CPA Business Taxation corporate agreem D Page view A Read aloud Draw v High CORPORATE AGREEMENT Jasper Junction Corporation This corporation agreement (the Agreement ) made and entered into this 6 day of January, 20x1 (the Execution Date ), AMONGST Chao of 693 Feather Street, Crane, North Dakota, 58585 Iris of 459 Wing Street, Crane, North Dakota, 58585 Nolan of 4455 Nest Street, Crane, North Dakota, 58585 Individually the Shareholder and collectively the Shareholders BACKGROUND The Shareholders wish to associate themselves as owners in the business The terms and conditions of this Agreement set out the terms and conditions as to how they will be Shareholders The firm name of the Corporation will be JASPER JUNCTION CORPORATION It will also be known as JJC and referred to in the remainder of this document as JJC Purpose The purpose of JJC will be MANUFACTURING Place of Business The principal location of the business of JC will be at 9322 Flight Avenue, Crane, North Dakota, 58585 until such time that the corporation Board of Directors designates a different location IN CONSIDERATION OF and as a condition of the Shareholders entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows Formation By this Agreement the Shareholders enter into a corporation in accordance with the laws of the State of North Dakota The rights and obligations of the Shareholders will be as stated in the applicable legislation of the State of North Dakota (the Act), except as otherwise provided here Authorized common shares of JJC are 1 million The par value of each share of common stock will be $100 00 and its fair value will vary based on the value of JJC Each share of common stock will have the rights of one vote at shareholder meetings Nonvoting stock is authorized to be issued with not more than 500,000 shares permissible Common stock will be issued to the shareholders based on the net fair value contributed to the corporation Authorized preferred shares are 5,000 with a par value of $1,000 00 per share No preferred shares will be issued at the time of incorporation Bonds in valuation units of $10,000 may be issued Governance The first shareholder meeting shall take place the first day of February, 20X1 and thereafter annually on the first day of February Written minutes of the meetings must be available for shareholder review A Board of Directors shall be established by a vote of the shareholders The Board of Directors will appoint the officers and review their performance annually Changes to the incorporation agreement must be approved by a 60 shareholder vote based on common stock voting rights Distributions Subject to state law, the Board of Directors will declare dividends based on ownership as of a date the Board selects, and payment of the dividends must be within 30 days of such date Distributions that would impair the manufacturing operations are not permitted Dividends on common stock are not cumulative Shareholders can force distributions by a 60 vote when there are excess liquid assets that have no valid business purpose for their accumulation Capitalization Initial capitalization is provided by the initial Shareholders of Nolan, Chao and Iris Each of the Shareholders has contributed to the capital of JJC in the form of cash or property in agreed upon value for the stated shares of stock, as follows Common Stock Shareholder Chao 350 Iris Contribution Description $150,000 CASH and EQUIPMENT valued at $320,000 There is a $120,000 recourse loan on the equipment INVENTORY valued at $500,000 No loans are attached to this asset LAND and BUILDING valued at $650,000 with a $400,000 nonrecourse mortgage 400 Nolan 250 At time of incorporation, Iris will receive 10 bonds ($100,000) as partial consideration for her inventory contribution Jasper Junction Corporation (JJC) is an accrual basis, calendar year entity that was created by Chao, Iris, and Nolan in 20X1 JJC furnishes the original incorporation agreement The shareholders' bases in the assets contributed are as follows Cash $150,000 Equipment $245,000 Inventory $380,000 Land and Building $375,000 The first five years of business have been lean years Nolan had to loan the corporation $75,000 to ensure that JJC had enough cash to pay its bills and its Accumulated Earnings and Profits only amounts to $23,000 at the end of 20X5 JJC has its first year of substantial income in 20X6 It also sells some of its land for $100,000 cash, but the sale results in a capital loss The Board of Directors decides to pay $250,000 in dividends to its shareholders This is in addition to the $3,500 of interest it pays on the bonds and the $1 500 it pays to Nolan on the money he loaned JJC The income and expenses of JJC for 20X6, taxable income and current E P are provided in the Table below Corporate Agreement Taxable current Income ESP Amount 176,500 412,000 412,000 150,000 (150, 800) 133,000 133,000 1,888 1,eee Income Taxable Income Sales COGS Dividends (own 5 ) Muni Bond Interest Expenses Capital loss Interest Expense Operating Expenses Key Life Insurance Premiums Taxable income before Special Deductions Charitable contributions Dividend Receivable Deduction Taxable Income Federal Income Tax Current E P 32,935 (32,935) 5,000 (5,000) 120,080 (128, 880) 6,000 (6,800) 270,000 30,880 (27,880) (3,880) 66,500) 66,500 176,500 37,065 (37,665) 165,000 Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal formate distributions (Decreases should be entered with a minus sign ) crir los poidle Agreeth Taxable Current Income E P Amount 176,500 412,000 412,000 150,000 (150,000) 133,000 133,000 1,000 1,000 Income Taxable Income Sales COGS Dividends (own 5 ) Muni Bond Interest Expenses Capital loss Interest Expense Operating Expenses Key Life Insurance Premiums Taxable income before Special Deductions Charitable Contributions Dividend Receivable Deduction Taxable Income Federal Income Tax Current E P 32,935 (32,935) 5,000 (5,000) 120,000 (120,000) 6,000 (6,000) 270,000 30,000 (27,000) (3,000) (66,500) 66,500 176,500 37,065 (37,065) 165,000 Analyze the information provided to reconcile the shareholders' beginning a consequences of JJC's corporate distributions (Decreases should be entere Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal tax consequences of DC's corporate distributions (Decreases should be entered with a minus sign ) Shareholder Ownership Percentage ( 33 X 2 Chad 1 3 Answer is complete but not entirely correct Beginning Increases Ending Basis in or Basis in Taxable Distributions Stock (Decreases) Stock (DividendsCapital Gains) $ 38,333 3 S 7,666 4 $375,666 3 5 Dividends $ 8 3333 6 Capital $ 10,978 gais $ 383,333 X s 7666 10 $375,666 11 Dividends $ 83,333 12 Capital $ 10,978 gains $ 383,333 15 7,667 16 $375,667 17 Dividends $ 83,333 18 Capital $ 10,978 gains Iris 7 33 XB Nolan 13 34 14 CORPORATE AGREEMENT Jasper Junction Corporation This corporation agreement (the Agreement ) made and entered into this 6 day of January, 20x1 (the Execution Date ), AMONGST Chao of 693 Feather Street, Crane, North Dakota, 58585 Iris of 459 Wing Street, Crane, North Dakota, 58585 Nolan of 4455 Nest Street, Crane, North Dakota 58585 Individually the Shareholder and collectively the Shareholders BACKGROUND The Shareholders wish to associate themselves as owners in the business The terms and conditions of this Agreement set out the terms and conditions as to how they will be Shareholders The firm name of the Corporation will be JASPER JUNCTION CORPORATION It will also be known as JJC and referred to in the remainder of this document as JJC Purpose The purpose of JJC will be MANUFACTURING Place of Business The principal location of the business of JJC will be at 9322 Flight Avenue, Crane, North Dakota, 58585 until such time that the corporation Board of Directors designates a different location IN CONSIDERATION OF and as a condition of the Shareholders entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows Formation By this Agreement the Shareholders enter into a corporation in accordance with the laws of the State of North Dakota The rights and obligations of the Shareholders will be as stated in the applicable legislation of the State of North Dakota (the Act ), except as otherwise provided here Authorized common shares of JJC are 1 million The par value of each share of common stock will be $100 00 and its fair value will vary based on the value of JJC Each share of common stock will have the rights of one vote at shareholder meetings Nonvoting stock is authorized to be issued with not more than 500,000 shares permissible Common stock will be issued to the shareholders based on the net fair value contributed to the corporation Authorized preferred shares are 5,000 with a par value of $1,000 00 per share No preferred shares will be issued at the time of incorporation, Bonds in valuation units of $10,000 may be issued a Governance The first shareholder meeting shall take place the first day of February, 20X1 and thereafter annually on the first day of February Written minutes of the meetings must be available for shareholder review A Board of Directors shall be established by a vote of the shareholders The Board of Directors will appoint the officers and review their performance annually Changes to the incorporation agreement must be approved by a 60 shareholder vote based on common stock voting rights Distributions Subject to state law, the Board of Directors will declare dividends based on ownership as of a date the Board selects, and payment of the dividends must be within 30 days of such date Distributions that would impair the manufacturing operations are not permitted Dividends on common stock are not cumulative Shareholders can force distributions by a 60 vote when there are excess liquid assets that have no valid business purpose for their accumulation Capitalization Initial capitalization is provided by the initial Shareholders of Nolan, Chao and Iris Each of the Shareholders has contributed to the capital of JJC in the form of cash or property in agreed upon value for the stated shares of stock, as follows Shareholder Common Stock Chao 350 Iris Contribution Description $150,000 CASH and EQUIPMENT valued at $320,000 There is a $120,000 recourse loan on the equipment INVENTORY valued at $500,000 No loans are attached to this asset LAND and BUILDING valued at $650,000 with a $400,000 nonrecourse mortgage 400 Nolan 250 At time of incorporation, Iris will receive 10 bonds ($100,000) as partial consideration for her inventory contribution 4 Jasper Junction Corporation (JC) is an accrual basis, calendar year entity that was created by Choo, Iris, and Nolan in 20X1 JJC furnishes the original incorporation agreement The shareholders' bases in the assets contributed are as follows Cash $150 000 Equipment $245 000 Inventory $380,000 Land and Building $375,000 017 The first five years of business have been lean years Nolan had to loan the corporation $75,000 to ensure that JJC had enough cash to pay its bills and its Accumulated Earnings and Profits only amounts to $23,000 at the end of 20X5 JUC has its first year of substantial income in 20X6 It also sells some of its land for $100 000 cash, but the sale results in a capital loss The Board of Directors decides to pay $250,000 in dividends to its shareholders This is in addition to the $3,500 of interest it pays on the bonds and the $1 500 it pays to Nolan on the money he loaned JJC The income and expenses of JJC for 20x6 taxable income, and current E P are provided in the Table below Corporate Agreement Taxable Current Income ERP Amount Income Taxable income Sales COGS Dividends ( 5x) Hund Bond Interest Expenses Capital loss Interest Expense Operating Expenses Key Life Insurance Premium Taxable income before Special Deductions Charitable contributions Dividend leceivable Deduction Taxable income Federal Income Tax Current SP 176,500 412,000 412,000 150 000 (150 000) 133,800 133,000 1,000 1,000 12,935 (32,935) 5,000 (5,000) 120,000 (120,000) 6,000 (6,000) 270,000 30,000 (27,000) (3,600) (66,500 66,500 176,500 37,065 (2 065) 165,000 Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal tax consequences of JJC's corporate distributions (Decreases should be entered with a minus sign ) Shareholder Ownership Percentage 1 33 2 Chao 1 Answer is complete but not entirely correct eginning Increases Ending Taxable Distributions Basis in Basis in Stock (Decreases Stock (Dividends Capital Oain) $ 38,333 $ 7,0064 $375,000 5 Dividends $8 333 6 Capital gans $ 10,978 $383,3339 $ 7,668 10 3375,666 11 Dividends $33333 12 Capital $10 078 gans $ 3,333 15 $ 7,667 16 $375,667 17 Dividends 5 83,333 to Capital $ 10,978 Iris 7 33 3 Nolan 13 3414 CORPORATE AGREEMENT Jasper Junction Corporation This corporation agreement (the Agreement ) made and entered into this 6 day of January, 20X1 (the Execution Date ) AMONGST Chao of 693 Feather Street, Crane, North Dakota, 58585 Iris of 459 Wing Street, Crane, North Dakota, 58585 Nolan of 4455 Nest Street, Crane, North Dakota, 58585 Individually the Shareholder and collectively the Shareholders BACKGROUND The Shareholders wish to associate themselves as owners in the business The terms and conditions of this Agreement set out the terms and conditions as to how they will be Shareholders The firm name of the Corporation will be JASPER JUNCTION CORPORATION It will also be known as JJC and referred to in the remainder of this document as JJC Purpose The purpose of JC will be MANUFACTURING Place of Business The principal location of the business of JJC will be at 9322 Flight Avenue, Crane, North Dakota, 58585 until such time that the corporation Board of Directors designates a different location IN CONSIDERATION OF and as a condition of the Shareholders entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows Formation By this Agreement the Shareholders enter into a corporation in accordance with the laws of the State of North Dakota The rights and obligations of the Shareholders will be as stated in the applicable legislation of the State of North Dakota (the Act ), except as otherwise provided here Authorized common shares of JJC are 1 million The par value of each share of common stock will be $100 00 and its fair value will vary based on the value of JJC Each share of common stock will have the rights of one vote at shareholder meetings Nonvoting stock is authorized to be issued with not more than 500,000 shares permissible Common stock will be issued to the shareholders based on the net fair value contributed to the corporation Authorized preferred shares are 5,000 with a par value of $1,000 00 per share No preferred shares will be issued at the time of incorporation Bonds in valuation units of $10,000 may be issued Governance The first shareholder meeting shall take place the first day of February, 20X1 and thereafter annually on the first day of February Written minutes of the meetings must be available for shareholder review A Board of Directors shall be established by a vote of the shareholders The Board of Directors will appoint the officers and review their performance annually Changes to the incorporation agreement must be approved by a 60 shareholder vote based on common stock voting rights Distributions Subject to state law, the Board of Directors will declare dividends based on ownership as of a date the Board selects, and payment of the dividends must be within 30 days of such date Distributions that would impair the manufacturing operations are not permitted Dividends on common stock are not cumulative Shareholders can force distributions by a 60 vote when there are excess liquid assets that have no valid business purpose for their accumulation Capitalization Initial capitalization is provided by the initial Shareholders of Nolan, Chao and Iris Each of the Shareholders has contributed to the capital of JJC in the form of cash or property in agreed upon value for the stated shares of stock, as follows Shareholder Contribution Description Common Stock Chao 350 Iris 400 $150,000 CASH and EQUIPMENT valued at $320,000 There is a $120,000 recourse loan on the equipment INVENTORY valued at $500,000 No loans are attached to this asset LAND and BUILDING valued at $650,000 with a $400,000 nonrecourse mortgage Nolan 250 At time of incorporation, Iris will receive 10 bonds ($100,000) as partial consideration for her inventory contribution Jasper Junction Corporation (JJC) is an accrual basis, calendar year entity that was created by Chao, Iris, and Nolan in 20X1 JJC furnishes the original incorporation agreement The shareholders' bases in the assets contributed are as follows Cash $150,000 Equipment $245,000 Inventory $380,000 Land and Building $375,000 The first five years of business have been lean years Nolan had to loan the corporation $75,000 to ensure that JJC had enough cash to pay its bills and its Accumulated Earnings and Profits only amounts to $23,000 at the end of 20x5 JJC has its first year of substantial income in 20X6 It also sells some of its land for $100,000 cash, but the sale results in a capital loss The Board of Directors decides to pay $250,000 in dividends to its shareholders This is in addition to the $3 500 of interest it pays on the bonds and the $1 500 it pays to Nolon on the money he loaned JJC The income and expenses of JJC for 20X6, taxable income and current E P are provided in the Table below Corporate Agteement Taxable Current Amount Income ERP Incone Taxable Income 176,500 Sales 412,000 412,000 COGS 150,000 (150, eee) Dividends (oun 5) 133,000 133,000 Muni Bond Interest 1,000 1,000 Expenses Capital loss 32,935 (32,935) Interest Expense 5,000 (5,000) Operating Expenses 120,000 (120,000) Key Life Insurance Premius 6,000 (6,000) Taxable income before Special Deductions 270,000 Charitable Contributions 30,000 (27,000) (3 000) Dividend Receivable Deduction (66,580) 66,500 Taxable income 176,500 Federal Income Tax 37,065 (37,865) Current ERP 165,000 Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal tax consequences of JJC's corporate distributions (Decreases should be entered with a minus sign ) Shareholder Ownership Percentage Chao 1 33 2 Beginning Ending Increases or Taxablo Distributions Basis in (Decreases) Basis in Stock (Dividends Capital Gains) Stock $ 38,3333 $ 7 6664 $ 375,666 5 Dividends $ 8,333 6 Capital gains $ 10,978 $ 383, 3339 $ 7,666 10 $ 375,666 11 Dividends $ 83,333 12 Capital gains $ 10,978 $ 383,333 15 $ 7,657 16 S 375,667 17 Dividends $ 83,333 18 Capital gains $ 10,978 Ins 7 33 8 Nolan 13 34 14 corporate agreement pdf on com Media Connect Production bne Roger CPA Business Taxation corporate agreem D Page view A Read aloud Draw v High CORPORATE AGREEMENT Jasper Junction Corporation This corporation agreement (the Agreement ) made and entered into this 6 day of January, 20x1 (the Execution Date ), AMONGST Chao of 693 Feather Street, Crane, North Dakota, 58585 Iris of 459 Wing Street, Crane, North Dakota, 58585 Nolan of 4455 Nest Street, Crane, North Dakota, 58585 Individually the Shareholder and collectively the Shareholders BACKGROUND The Shareholders wish to associate themselves as owners in the business The terms and conditions of this Agreement set out the terms and conditions as to how they will be Shareholders The firm name of the Corporation will be JASPER JUNCTION CORPORATION It will also be known as JJC and referred to in the remainder of this document as JJC Purpose The purpose of JJC will be MANUFACTURING Place of Business The principal location of the business of JC will be at 9322 Flight Avenue, Crane, North Dakota, 58585 until such time that the corporation Board of Directors designates a different location IN CONSIDERATION OF and as a condition of the Shareholders entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows Formation By this Agreement the Shareholders enter into a corporation in accordance with the laws of the State of North Dakota The rights and obligations of the Shareholders will be as stated in the applicable legislation of the State of North Dakota (the Act), except as otherwise provided here Authorized common shares of JJC are 1 million The par value of each share of common stock will be $100 00 and its fair value will vary based on the value of JJC Each share of common stock will have the rights of one vote at shareholder meetings Nonvoting stock is authorized to be issued with not more than 500,000 shares permissible Common stock will be issued to the shareholders based on the net fair value contributed to the corporation Authorized preferred shares are 5,000 with a par value of $1,000 00 per share No preferred shares will be issued at the time of incorporation Bonds in valuation units of $10,000 may be issued Governance The first shareholder meeting shall take place the first day of February, 20X1 and thereafter annually on the first day of February Written minutes of the meetings must be available for shareholder review A Board of Directors shall be established by a vote of the shareholders The Board of Directors will appoint the officers and review their performance annually Changes to the incorporation agreement must be approved by a 60 shareholder vote based on common stock voting rights Distributions Subject to state law, the Board of Directors will declare dividends based on ownership as of a date the Board selects, and payment of the dividends must be within 30 days of such date Distributions that would impair the manufacturing operations are not permitted Dividends on common stock are not cumulative Shareholders can force distributions by a 60 vote when there are excess liquid assets that have no valid business purpose for their accumulation Capitalization Initial capitalization is provided by the initial Shareholders of Nolan, Chao and Iris Each of the Shareholders has contributed to the capital of JJC in the form of cash or property in agreed upon value for the stated shares of stock, as follows Common Stock Shareholder Chao 350 Iris Contribution Description $150,000 CASH and EQUIPMENT valued at $320,000 There is a $120,000 recourse loan on the equipment INVENTORY valued at $500,000 No loans are attached to this asset LAND and BUILDING valued at $650,000 with a $400,000 nonrecourse mortgage 400 Nolan 250 At time of incorporation, Iris will receive 10 bonds ($100,000) as partial consideration for her inventory contribution Jasper Junction Corporation (JJC) is an accrual basis, calendar year entity that was created by Chao, Iris, and Nolan in 20X1 JJC furnishes the original incorporation agreement The shareholders' bases in the assets contributed are as follows Cash $150,000 Equipment $245,000 Inventory $380,000 Land and Building $375,000 The first five years of business have been lean years Nolan had to loan the corporation $75,000 to ensure that JJC had enough cash to pay its bills and its Accumulated Earnings and Profits only amounts to $23,000 at the end of 20X5 JJC has its first year of substantial income in 20X6 It also sells some of its land for $100,000 cash, but the sale results in a capital loss The Board of Directors decides to pay $250,000 in dividends to its shareholders This is in addition to the $3,500 of interest it pays on the bonds and the $1 500 it pays to Nolan on the money he loaned JJC The income and expenses of JJC for 20X6, taxable income and current E P are provided in the Table below Corporate Agreement Taxable current Income ESP Amount 176,500 412,000 412,000 150,000 (150, 800) 133,000 133,000 1,888 1,eee Income Taxable Income Sales COGS Dividends (own 5 ) Muni Bond Interest Expenses Capital loss Interest Expense Operating Expenses Key Life Insurance Premiums Taxable income before Special Deductions Charitable contributions Dividend Receivable Deduction Taxable Income Federal Income Tax Current E P 32,935 (32,935) 5,000 (5,000) 120,080 (128, 880) 6,000 (6,800) 270,000 30,880 (27,880) (3,880) 66,500) 66,500 176,500 37,065 (37,665) 165,000 Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal formate distributions (Decreases should be entered with a minus sign ) crir los poidle Agreeth Taxable Current Income E P Amount 176,500 412,000 412,000 150,000 (150,000) 133,000 133,000 1,000 1,000 Income Taxable Income Sales COGS Dividends (own 5 ) Muni Bond Interest Expenses Capital loss Interest Expense Operating Expenses Key Life Insurance Premiums Taxable income before Special Deductions Charitable Contributions Dividend Receivable Deduction Taxable Income Federal Income Tax Current E P 32,935 (32,935) 5,000 (5,000) 120,000 (120,000) 6,000 (6,000) 270,000 30,000 (27,000) (3,000) (66,500) 66,500 176,500 37,065 (37,065) 165,000 Analyze the information provided to reconcile the shareholders' beginning a consequences of JJC's corporate distributions (Decreases should be entere Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal tax consequences of DC's corporate distributions (Decreases should be entered with a minus sign ) Shareholder Ownership Percentage ( 33 X 2 Chad 1 3 Answer is complete but not entirely correct Beginning Increases Ending Basis in or Basis in Taxable Distributions Stock (Decreases) Stock (DividendsCapital Gains) $ 38,333 3 S 7,666 4 $375,666 3 5 Dividends $ 8 3333 6 Capital $ 10,978 gais $ 383,333 X s 7666 10 $375,666 11 Dividends $ 83,333 12 Capital $ 10,978 gains $ 383,333 15 7,667 16 $375,667 17 Dividends $ 83,333 18 Capital $ 10,978 gains Iris 7 33 XB Nolan 13 34 14 CORPORATE AGREEMENT Jasper Junction Corporation This corporation agreement (the Agreement ) made and entered into this 6 day of January, 20x1 (the Execution Date ), AMONGST Chao of 693 Feather Street, Crane, North Dakota, 58585 Iris of 459 Wing Street, Crane, North Dakota, 58585 Nolan of 4455 Nest Street, Crane, North Dakota 58585 Individually the Shareholder and collectively the Shareholders BACKGROUND The Shareholders wish to associate themselves as owners in the business The terms and conditions of this Agreement set out the terms and conditions as to how they will be Shareholders The firm name of the Corporation will be JASPER JUNCTION CORPORATION It will also be known as JJC and referred to in the remainder of this document as JJC Purpose The purpose of JJC will be MANUFACTURING Place of Business The principal location of the business of JJC will be at 9322 Flight Avenue, Crane, North Dakota, 58585 until such time that the corporation Board of Directors designates a different location IN CONSIDERATION OF and as a condition of the Shareholders entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows Formation By this Agreement the Shareholders enter into a corporation in accordance with the laws of the State of North Dakota The rights and obligations of the Shareholders will be as stated in the applicable legislation of the State of North Dakota (the Act ), except as otherwise provided here Authorized common shares of JJC are 1 million The par value of each share of common stock will be $100 00 and its fair value will vary based on the value of JJC Each share of common stock will have the rights of one vote at shareholder meetings Nonvoting stock is authorized to be issued with not more than 500,000 shares permissible Common stock will be issued to the shareholders based on the net fair value contributed to the corporation Authorized preferred shares are 5,000 with a par value of $1,000 00 per share No preferred shares will be issued at the time of incorporation, Bonds in valuation units of $10,000 may be issued a Governance The first shareholder meeting shall take place the first day of February, 20X1 and thereafter annually on the first day of February Written minutes of the meetings must be available for shareholder review A Board of Directors shall be established by a vote of the shareholders The Board of Directors will appoint the officers and review their performance annually Changes to the incorporation agreement must be approved by a 60 shareholder vote based on common stock voting rights Distributions Subject to state law, the Board of Directors will declare dividends based on ownership as of a date the Board selects, and payment of the dividends must be within 30 days of such date Distributions that would impair the manufacturing operations are not permitted Dividends on common stock are not cumulative Shareholders can force distributions by a 60 vote when there are excess liquid assets that have no valid business purpose for their accumulation Capitalization Initial capitalization is provided by the initial Shareholders of Nolan, Chao and Iris Each of the Shareholders has contributed to the capital of JJC in the form of cash or property in agreed upon value for the stated shares of stock, as follows Shareholder Common Stock Chao 350 Iris Contribution Description $150,000 CASH and EQUIPMENT valued at $320,000 There is a $120,000 recourse loan on the equipment INVENTORY valued at $500,000 No loans are attached to this asset LAND and BUILDING valued at $650,000 with a $400,000 nonrecourse mortgage 400 Nolan 250 At time of incorporation, Iris will receive 10 bonds ($100,000) as partial consideration for her inventory contribution

Question

4 Jasper Junction Corporation (JC) is an accrual basis, calendar year entity that was created by Choo, Iris, and Nolan in 20X1  JJC furnishes the original incorporation agreement  The shareholders' bases in the assets contributed are as follows  Cash $150 000 Equipment $245 000 Inventory $380,000 Land and Building $375,000 017 The first five years of business have been lean years Nolan had to loan the corporation $75,000 to ensure that JJC had enough cash to pay its bills and its Accumulated Earnings and Profits only amounts to $23,000 at the end of 20X5 JUC has its first year of substantial income in 20X6  It also sells some of its land for $100 000 cash, but the sale results in a capital loss  The Board of Directors decides to pay $250,000 in dividends to its shareholders  This is in addition to the $3,500 of interest it pays on the bonds and the $1 500 it pays to Nolan on the money he loaned JJC The income and expenses of JJC for 20x6 taxable income, and current E P are provided in the Table below Corporate Agreement Taxable Current Income ERP Amount Income Taxable income Sales COGS Dividends ( 5x) Hund Bond Interest Expenses Capital loss Interest Expense Operating Expenses Key Life Insurance Premium Taxable income before Special Deductions Charitable contributions Dividend leceivable Deduction Taxable income Federal Income Tax Current SP 176,500 412,000 412,000 150 000 (150 000) 133,800 133,000 1,000 1,000 12,935 (32,935) 5,000 (5,000) 120,000 (120,000) 6,000 (6,000) 270,000 30,000 (27,000) (3,600) (66,500 66,500 176,500 37,065 (2 065) 165,000 Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal tax consequences of JJC's corporate distributions (Decreases should be entered with a minus sign ) Shareholder Ownership Percentage 1  33  2 Chao 1 Answer is complete but not entirely correct  eginning Increases Ending Taxable Distributions Basis in Basis in Stock (Decreases Stock (Dividends Capital Oain) $ 38,333 $ 7,0064 $375,000 5  Dividends $8 333 6 Capital gans $ 10,978 $383,3339 $ 7,668 10 3375,666 11 Dividends $33333 12 Capital $10 078 gans $ 3,333 15 $ 7,667 16 $375,667 17 Dividends 5 83,333 to Capital $ 10,978 Iris 7 33  3 Nolan 13 3414 CORPORATE AGREEMENT Jasper Junction Corporation This corporation agreement (the  Agreement ) made and entered into this 6 day of January, 20X1 (the  Execution Date )    AMONGST  Chao of 693 Feather Street, Crane, North Dakota, 58585 Iris of 459 Wing Street, Crane, North Dakota, 58585 Nolan of 4455 Nest Street, Crane, North Dakota, 58585 Individually the  Shareholder  and collectively the  Shareholders         BACKGROUND  The Shareholders wish to associate themselves as owners in the business  The terms and conditions of this Agreement set out the terms and conditions as to how they will be Shareholders The firm name of the Corporation will be  JASPER JUNCTION CORPORATION  It will also be known as JJC and referred to in the remainder of this document as JJC  Purpose The purpose of JC will be  MANUFACTURING    Place of Business The principal location of the business of JJC will be at 9322 Flight Avenue, Crane, North Dakota, 58585 until such time that the corporation Board of Directors designates a different location  IN CONSIDERATION OF and as a condition of the Shareholders entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows    Formation By this Agreement the Shareholders enter into a corporation in accordance with the laws of the State of North Dakota  The rights and obligations of the Shareholders will be as stated in the applicable legislation of the State of North Dakota (the  Act ), except as otherwise provided here  Authorized common shares of JJC are 1 million  The par value of each share of common stock will be $100 00 and its fair value will vary based on the value of JJC  Each share of common stock will have the rights of one vote at shareholder meetings  Nonvoting stock is authorized to be issued with not more than 500,000 shares permissible  Common stock will be issued to the shareholders based on the net fair value contributed to the corporation Authorized preferred shares are 5,000 with a par value of $1,000 00 per share  No preferred shares will be issued at the time of incorporation Bonds in valuation units of $10,000 may be issued          Governance The first shareholder meeting shall take place the first day of February, 20X1 and thereafter annually on the first day of February  Written minutes of the meetings must be available for shareholder review  A Board of Directors shall be established by a vote of the shareholders  The Board of Directors will appoint the officers and review their performance annually  Changes to the incorporation agreement must be approved by a 60  shareholder vote based on common stock voting rights    Distributions Subject to state law, the Board of Directors will declare dividends based on ownership as of a date the Board selects, and payment of the dividends must be within 30 days of such date  Distributions that would impair the manufacturing operations are not permitted  Dividends on common stock are not cumulative  Shareholders can force distributions by a 60  vote when there are excess liquid assets that have no valid business purpose for their accumulation          Capitalization Initial capitalization is provided by the initial Shareholders of Nolan, Chao and Iris  Each of the Shareholders has contributed to the capital of JJC in the form of cash or property in agreed  upon value for the stated shares of stock, as follows    Shareholder Contribution Description Common Stock Chao 350 Iris 400  $150,000 CASH and EQUIPMENT valued at $320,000  There is a $120,000 recourse loan on the equipment  INVENTORY valued at $500,000  No loans are attached to this asset  LAND and BUILDING valued at $650,000 with a $400,000 nonrecourse mortgage  Nolan 250 At time of incorporation, Iris will receive 10 bonds ($100,000) as partial consideration for her inventory contribution Jasper Junction Corporation (JJC) is an accrual basis, calendar year entity that was created by Chao, Iris, and Nolan in 20X1  JJC furnishes the original incorporation agreement The shareholders' bases in the assets contributed are as follows  Cash $150,000 Equipment $245,000 Inventory $380,000 Land and Building $375,000 The first five years of business have been lean years  Nolan had to loan the corporation $75,000 to ensure that JJC had enough cash to pay its bills and its Accumulated Earnings and Profits only amounts to $23,000 at the end of 20x5 JJC has its first year of substantial income in 20X6  It also sells some of its land for $100,000 cash, but the sale results in a capital loss The Board of Directors decides to pay $250,000 in dividends to its shareholders  This is in addition to the $3 500 of interest it pays on the bonds and the $1 500 it pays to Nolon on the money he loaned JJC  The income and expenses of JJC for 20X6, taxable income and current E P are provided in the Table below Corporate Agteement Taxable Current Amount Income ERP Incone Taxable Income 176,500 Sales 412,000 412,000 COGS 150,000 (150, eee) Dividends (oun 5) 133,000 133,000 Muni Bond Interest 1,000 1,000 Expenses Capital loss 32,935 (32,935) Interest Expense 5,000 (5,000) Operating Expenses 120,000 (120,000) Key Life Insurance Premius 6,000 (6,000) Taxable income before Special Deductions 270,000 Charitable Contributions 30,000 (27,000) (3 000) Dividend Receivable Deduction (66,580) 66,500 Taxable income 176,500 Federal Income Tax 37,065 (37,865) Current ERP 165,000 Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal tax consequences of JJC's corporate distributions (Decreases should be entered with a minus sign ) Shareholder Ownership Percentage Chao 1 33  2 Beginning Ending Increases or Taxablo Distributions Basis in (Decreases) Basis in Stock (Dividends Capital Gains) Stock $ 38,3333 $ 7 6664 $ 375,666 5 Dividends $ 8,333 6 Capital gains $ 10,978 $ 383, 3339 $ 7,666 10 $ 375,666 11  Dividends $ 83,333 12 Capital gains $ 10,978 $ 383,333 15 $ 7,657 16 S 375,667 17 Dividends $ 83,333 18 Capital gains $ 10,978 Ins 7 33 8 Nolan 13 34 14 corporate agreement pdf on com Media Connect Production bne Roger CPA Business Taxation corporate agreem   D Page view A Read aloud Draw v High CORPORATE AGREEMENT Jasper Junction Corporation This corporation agreement (the  Agreement ) made and entered into this 6 day of January, 20x1 (the  Execution Date ), AMONGST  Chao of 693 Feather Street, Crane, North Dakota, 58585 Iris of 459 Wing Street, Crane, North Dakota, 58585 Nolan of 4455 Nest Street, Crane, North Dakota, 58585 Individually the  Shareholder and collectively the  Shareholders   BACKGROUND        The Shareholders wish to associate themselves as owners in the business  The terms and conditions of this Agreement set out the terms and conditions as to how they will be Shareholders  The firm name of the Corporation will be JASPER JUNCTION CORPORATION  It will also be known as JJC and referred to in the remainder of this document as JJC  Purpose The purpose of JJC will be MANUFACTURING Place of Business The principal location of the business of JC will be at 9322 Flight Avenue, Crane, North Dakota, 58585 until such time that the corporation Board of Directors designates a different location  IN CONSIDERATION OF and as a condition of the Shareholders entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows  Formation By this Agreement the Shareholders enter into a corporation in accordance with the laws of the State of North Dakota  The rights and obligations of the Shareholders will be as stated in the applicable legislation of the State of North Dakota (the  Act), except as otherwise provided here  Authorized common shares of JJC are 1 million  The par value of each share of common stock will be $100 00 and its fair value will vary based on the value of JJC  Each share of common stock will have the rights of one vote at shareholder meetings  Nonvoting stock is authorized to be issued with not more than 500,000 shares permissible  Common stock will be issued to the shareholders based on the net fair value contributed to the corporation Authorized preferred shares are 5,000 with a par value of $1,000 00 per share  No preferred shares will be issued at the time of incorporation Bonds in valuation units of $10,000 may be issued       Governance The first shareholder meeting shall take place the first day of February, 20X1 and thereafter annually on the first day of February  Written minutes of the meetings must be available for shareholder review  A Board of Directors shall be established by a vote of the shareholders  The Board of Directors will appoint the officers and review their performance annually  Changes to the incorporation agreement must be approved by a 60  shareholder vote based on common stock voting rights    Distributions Subject to state law, the Board of Directors will declare dividends based on ownership as of a date the Board selects, and payment of the dividends must be within 30 days of such date  Distributions that would impair the manufacturing operations are not permitted  Dividends on common stock are not cumulative  Shareholders can force distributions by a 60  vote when there are excess liquid assets that have no valid business purpose for their accumulation      Capitalization Initial capitalization is provided by the initial Shareholders of Nolan, Chao and Iris  Each of the Shareholders has contributed to the capital of JJC in the form of cash or property in agreed  upon value for the stated shares of stock, as follows    Common Stock Shareholder Chao 350 Iris Contribution Description $150,000 CASH and EQUIPMENT valued at $320,000  There is a $120,000 recourse loan on the equipment  INVENTORY valued at $500,000  No loans are attached to this asset LAND and BUILDING valued at $650,000 with a $400,000 nonrecourse mortgage  400  Nolan 250 At time of incorporation, Iris will receive 10 bonds ($100,000) as partial consideration for her inventory contribution Jasper Junction Corporation (JJC) is an accrual basis, calendar year entity that was created by Chao, Iris, and Nolan in 20X1  JJC furnishes the original incorporation agreement  The shareholders' bases in the assets contributed are as follows  Cash $150,000 Equipment $245,000 Inventory $380,000 Land and Building $375,000 The first five years of business have been lean years  Nolan had to loan the corporation $75,000 to ensure that JJC had enough cash to pay its bills and its Accumulated Earnings and Profits only amounts to $23,000 at the end of 20X5  JJC has its first year of substantial income in 20X6  It also sells some of its land for $100,000 cash, but the sale results in a capital loss  The Board of Directors decides to pay $250,000 in dividends to its shareholders  This is in addition to the $3,500 of interest it pays on the bonds and the $1 500 it pays to Nolan on the money he loaned JJC  The income and expenses of JJC for 20X6, taxable income and current E P are provided in the Table below  Corporate Agreement Taxable current Income ESP Amount 176,500 412,000 412,000 150,000 (150, 800) 133,000 133,000 1,888 1,eee Income Taxable Income Sales COGS Dividends (own 5 ) Muni Bond Interest Expenses Capital loss Interest Expense Operating Expenses Key Life Insurance Premiums Taxable income before Special Deductions Charitable contributions Dividend Receivable Deduction Taxable Income Federal Income Tax Current E P 32,935 (32,935) 5,000 (5,000) 120,080 (128, 880) 6,000 (6,800) 270,000 30,880 (27,880) (3,880) 66,500) 66,500 176,500 37,065 (37,665) 165,000 Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal formate distributions  (Decreases should be entered with a minus sign ) crir los poidle Agreeth Taxable Current Income E P Amount 176,500 412,000 412,000 150,000 (150,000) 133,000 133,000 1,000 1,000 Income Taxable Income Sales COGS Dividends (own 5 ) Muni Bond Interest Expenses Capital loss Interest Expense Operating Expenses Key Life Insurance Premiums Taxable income before Special Deductions Charitable Contributions Dividend Receivable Deduction Taxable Income Federal Income Tax Current E P 32,935 (32,935) 5,000 (5,000) 120,000 (120,000) 6,000 (6,000) 270,000 30,000 (27,000) (3,000) (66,500) 66,500 176,500 37,065 (37,065) 165,000 Analyze the information provided to reconcile the shareholders' beginning a consequences of JJC's corporate distributions  (Decreases should be entere Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal tax consequences of DC's corporate distributions (Decreases should be entered with a minus sign ) Shareholder Ownership Percentage ( 33  X 2 Chad 1 3 Answer is complete but not entirely correct  Beginning Increases Ending Basis in or Basis in Taxable Distributions Stock (Decreases) Stock (DividendsCapital Gains) $ 38,333 3 S 7,666 4 $375,666 3 5 Dividends $ 8 3333 6  Capital $ 10,978 gais $ 383,333 X s 7666 10 $375,666 11 Dividends $ 83,333 12  Capital $ 10,978 gains $ 383,333 15 7,667 16 $375,667 17 Dividends $ 83,333 18 Capital $ 10,978 gains Iris 7 33  XB   Nolan 13 34  14  CORPORATE AGREEMENT Jasper Junction Corporation This corporation agreement (the  Agreement ) made and entered into this 6 day of January, 20x1 (the  Execution Date ),   AMONGST  Chao of 693 Feather Street, Crane, North Dakota, 58585 Iris of 459 Wing Street, Crane, North Dakota, 58585 Nolan of 4455 Nest Street, Crane, North Dakota 58585 Individually the  Shareholder  and collectively the  Shareholders    BACKGROUND  The Shareholders wish to associate themselves as owners in the business  The terms and conditions of this Agreement set out the terms and conditions as to how they will be Shareholders  The firm name of the Corporation will be  JASPER JUNCTION CORPORATION  It will also be known as JJC and referred to in the remainder of this document as JJC  Purpose The purpose of JJC will be  MANUFACTURING Place of Business The principal location of the business of JJC will be at 9322 Flight Avenue, Crane, North Dakota, 58585 until such time that the corporation Board of Directors designates a different location  IN CONSIDERATION OF and as a condition of the Shareholders entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows  Formation By this Agreement the Shareholders enter into a corporation in accordance with the laws of the State of North Dakota  The rights and obligations of the Shareholders will be as stated in the applicable legislation of the State of North Dakota (the  Act ), except as otherwise provided here  Authorized common shares of JJC are 1 million  The par value of each share of common stock will be $100 00 and its fair value will vary based on the value of JJC  Each share of common stock will have the rights of one vote at shareholder meetings  Nonvoting stock is authorized to be issued with not more than 500,000 shares permissible  Common stock will be issued to the shareholders based on the net fair value contributed to the corporation Authorized preferred shares are 5,000 with a par value of $1,000 00 per share  No preferred shares will be issued at the time of incorporation, Bonds in valuation units of $10,000 may be issued    a       Governance The first shareholder meeting shall take place the first day of February, 20X1 and thereafter annually on the first day of February  Written minutes of the meetings must be available for shareholder review  A Board of Directors shall be established by a vote of the shareholders  The Board of Directors will appoint the officers and review their performance annually  Changes to the incorporation agreement must be approved by a 60  shareholder vote based on common stock voting rights          Distributions Subject to state law, the Board of Directors will declare dividends based on ownership as of a date the Board selects, and payment of the dividends must be within 30 days of such date  Distributions that would impair the manufacturing operations are not permitted  Dividends on common stock are not cumulative  Shareholders can force distributions by a 60  vote when there are excess liquid assets that have no valid business purpose for their accumulation     Capitalization Initial capitalization is provided by the initial Shareholders of Nolan, Chao and Iris  Each of the Shareholders has contributed to the capital of JJC in the form of cash or property in agreed  upon value for the stated shares of stock, as follows    Shareholder Common Stock Chao 350 Iris Contribution Description $150,000 CASH and EQUIPMENT valued at $320,000  There is a $120,000 recourse loan on the equipment INVENTORY valued at $500,000  No loans are attached to this asset LAND and BUILDING valued at $650,000 with a $400,000 nonrecourse mortgage 400  Nolan 250 At time of incorporation, Iris will receive 10 bonds ($100,000) as partial consideration for her inventory contribution 4 Jasper Junction Corporation (JC) is an accrual basis, calendar year entity that was created by Choo, Iris, and Nolan in 20X1  JJC furnishes the original incorporation agreement  The shareholders' bases in the assets contributed are as follows  Cash $150 000 Equipment $245 000 Inventory $380,000 Land and Building $375,000 017 The first five years of business have been lean years Nolan had to loan the corporation $75,000 to ensure that JJC had enough cash to pay its bills and its Accumulated Earnings and Profits only amounts to $23,000 at the end of 20X5 JUC has its first year of substantial income in 20X6  It also sells some of its land for $100 000 cash, but the sale results in a capital loss  The Board of Directors decides to pay $250,000 in dividends to its shareholders  This is in addition to the $3,500 of interest it pays on the bonds and the $1 500 it pays to Nolan on the money he loaned JJC The income and expenses of JJC for 20x6 taxable income, and current E P are provided in the Table below Corporate Agreement Taxable Current Income ERP Amount Income Taxable income Sales COGS Dividends ( 5x) Hund Bond Interest Expenses Capital loss Interest Expense Operating Expenses Key Life Insurance Premium Taxable income before Special Deductions Charitable contributions Dividend leceivable Deduction Taxable income Federal Income Tax Current SP 176,500 412,000 412,000 150 000 (150 000) 133,800 133,000 1,000 1,000 12,935 (32,935) 5,000 (5,000) 120,000 (120,000) 6,000 (6,000) 270,000 30,000 (27,000) (3,600) (66,500 66,500 176,500 37,065 (2 065) 165,000 Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal tax consequences of JJC's corporate distributions (Decreases should be entered with a minus sign ) Shareholder Ownership Percentage 1  33  2 Chao 1 Answer is complete but not entirely correct  eginning Increases Ending Taxable Distributions Basis in Basis in Stock (Decreases Stock (Dividends Capital Oain) $ 38,333 $ 7,0064 $375,000 5  Dividends $8 333 6 Capital gans $ 10,978 $383,3339 $ 7,668 10 3375,666 11 Dividends $33333 12 Capital $10 078 gans $ 3,333 15 $ 7,667 16 $375,667 17 Dividends 5 83,333 to Capital $ 10,978 Iris 7 33  3 Nolan 13 3414 CORPORATE AGREEMENT Jasper Junction Corporation This corporation agreement (the  Agreement ) made and entered into this 6 day of January, 20X1 (the  Execution Date )    AMONGST  Chao of 693 Feather Street, Crane, North Dakota, 58585 Iris of 459 Wing Street, Crane, North Dakota, 58585 Nolan of 4455 Nest Street, Crane, North Dakota, 58585 Individually the  Shareholder  and collectively the  Shareholders         BACKGROUND  The Shareholders wish to associate themselves as owners in the business  The terms and conditions of this Agreement set out the terms and conditions as to how they will be Shareholders The firm name of the Corporation will be  JASPER JUNCTION CORPORATION  It will also be known as JJC and referred to in the remainder of this document as JJC  Purpose The purpose of JC will be  MANUFACTURING    Place of Business The principal location of the business of JJC will be at 9322 Flight Avenue, Crane, North Dakota, 58585 until such time that the corporation Board of Directors designates a different location  IN CONSIDERATION OF and as a condition of the Shareholders entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows    Formation By this Agreement the Shareholders enter into a corporation in accordance with the laws of the State of North Dakota  The rights and obligations of the Shareholders will be as stated in the applicable legislation of the State of North Dakota (the  Act ), except as otherwise provided here  Authorized common shares of JJC are 1 million  The par value of each share of common stock will be $100 00 and its fair value will vary based on the value of JJC  Each share of common stock will have the rights of one vote at shareholder meetings  Nonvoting stock is authorized to be issued with not more than 500,000 shares permissible  Common stock will be issued to the shareholders based on the net fair value contributed to the corporation Authorized preferred shares are 5,000 with a par value of $1,000 00 per share  No preferred shares will be issued at the time of incorporation Bonds in valuation units of $10,000 may be issued          Governance The first shareholder meeting shall take place the first day of February, 20X1 and thereafter annually on the first day of February  Written minutes of the meetings must be available for shareholder review  A Board of Directors shall be established by a vote of the shareholders  The Board of Directors will appoint the officers and review their performance annually  Changes to the incorporation agreement must be approved by a 60  shareholder vote based on common stock voting rights    Distributions Subject to state law, the Board of Directors will declare dividends based on ownership as of a date the Board selects, and payment of the dividends must be within 30 days of such date  Distributions that would impair the manufacturing operations are not permitted  Dividends on common stock are not cumulative  Shareholders can force distributions by a 60  vote when there are excess liquid assets that have no valid business purpose for their accumulation          Capitalization Initial capitalization is provided by the initial Shareholders of Nolan, Chao and Iris  Each of the Shareholders has contributed to the capital of JJC in the form of cash or property in agreed  upon value for the stated shares of stock, as follows    Shareholder Contribution Description Common Stock Chao 350 Iris 400  $150,000 CASH and EQUIPMENT valued at $320,000  There is a $120,000 recourse loan on the equipment  INVENTORY valued at $500,000  No loans are attached to this asset  LAND and BUILDING valued at $650,000 with a $400,000 nonrecourse mortgage  Nolan 250 At time of incorporation, Iris will receive 10 bonds ($100,000) as partial consideration for her inventory contribution Jasper Junction Corporation (JJC) is an accrual basis, calendar year entity that was created by Chao, Iris, and Nolan in 20X1  JJC furnishes the original incorporation agreement The shareholders' bases in the assets contributed are as follows  Cash $150,000 Equipment $245,000 Inventory $380,000 Land and Building $375,000 The first five years of business have been lean years  Nolan had to loan the corporation $75,000 to ensure that JJC had enough cash to pay its bills and its Accumulated Earnings and Profits only amounts to $23,000 at the end of 20x5 JJC has its first year of substantial income in 20X6  It also sells some of its land for $100,000 cash, but the sale results in a capital loss The Board of Directors decides to pay $250,000 in dividends to its shareholders  This is in addition to the $3 500 of interest it pays on the bonds and the $1 500 it pays to Nolon on the money he loaned JJC  The income and expenses of JJC for 20X6, taxable income and current E P are provided in the Table below Corporate Agteement Taxable Current Amount Income ERP Incone Taxable Income 176,500 Sales 412,000 412,000 COGS 150,000 (150, eee) Dividends (oun 5) 133,000 133,000 Muni Bond Interest 1,000 1,000 Expenses Capital loss 32,935 (32,935) Interest Expense 5,000 (5,000) Operating Expenses 120,000 (120,000) Key Life Insurance Premius 6,000 (6,000) Taxable income before Special Deductions 270,000 Charitable Contributions 30,000 (27,000) (3 000) Dividend Receivable Deduction (66,580) 66,500 Taxable income 176,500 Federal Income Tax 37,065 (37,865) Current ERP 165,000 Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal tax consequences of JJC's corporate distributions (Decreases should be entered with a minus sign ) Shareholder Ownership Percentage Chao 1 33  2 Beginning Ending Increases or Taxablo Distributions Basis in (Decreases) Basis in Stock (Dividends Capital Gains) Stock $ 38,3333 $ 7 6664 $ 375,666 5 Dividends $ 8,333 6 Capital gains $ 10,978 $ 383, 3339 $ 7,666 10 $ 375,666 11  Dividends $ 83,333 12 Capital gains $ 10,978 $ 383,333 15 $ 7,657 16 S 375,667 17 Dividends $ 83,333 18 Capital gains $ 10,978 Ins 7 33 8 Nolan 13 34 14 corporate agreement pdf on com Media Connect Production bne Roger CPA Business Taxation corporate agreem   D Page view A Read aloud Draw v High CORPORATE AGREEMENT Jasper Junction Corporation This corporation agreement (the  Agreement ) made and entered into this 6 day of January, 20x1 (the  Execution Date ), AMONGST  Chao of 693 Feather Street, Crane, North Dakota, 58585 Iris of 459 Wing Street, Crane, North Dakota, 58585 Nolan of 4455 Nest Street, Crane, North Dakota, 58585 Individually the  Shareholder and collectively the  Shareholders   BACKGROUND        The Shareholders wish to associate themselves as owners in the business  The terms and conditions of this Agreement set out the terms and conditions as to how they will be Shareholders  The firm name of the Corporation will be JASPER JUNCTION CORPORATION  It will also be known as JJC and referred to in the remainder of this document as JJC  Purpose The purpose of JJC will be MANUFACTURING Place of Business The principal location of the business of JC will be at 9322 Flight Avenue, Crane, North Dakota, 58585 until such time that the corporation Board of Directors designates a different location  IN CONSIDERATION OF and as a condition of the Shareholders entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows  Formation By this Agreement the Shareholders enter into a corporation in accordance with the laws of the State of North Dakota  The rights and obligations of the Shareholders will be as stated in the applicable legislation of the State of North Dakota (the  Act), except as otherwise provided here  Authorized common shares of JJC are 1 million  The par value of each share of common stock will be $100 00 and its fair value will vary based on the value of JJC  Each share of common stock will have the rights of one vote at shareholder meetings  Nonvoting stock is authorized to be issued with not more than 500,000 shares permissible  Common stock will be issued to the shareholders based on the net fair value contributed to the corporation Authorized preferred shares are 5,000 with a par value of $1,000 00 per share  No preferred shares will be issued at the time of incorporation Bonds in valuation units of $10,000 may be issued       Governance The first shareholder meeting shall take place the first day of February, 20X1 and thereafter annually on the first day of February  Written minutes of the meetings must be available for shareholder review  A Board of Directors shall be established by a vote of the shareholders  The Board of Directors will appoint the officers and review their performance annually  Changes to the incorporation agreement must be approved by a 60  shareholder vote based on common stock voting rights    Distributions Subject to state law, the Board of Directors will declare dividends based on ownership as of a date the Board selects, and payment of the dividends must be within 30 days of such date  Distributions that would impair the manufacturing operations are not permitted  Dividends on common stock are not cumulative  Shareholders can force distributions by a 60  vote when there are excess liquid assets that have no valid business purpose for their accumulation      Capitalization Initial capitalization is provided by the initial Shareholders of Nolan, Chao and Iris  Each of the Shareholders has contributed to the capital of JJC in the form of cash or property in agreed  upon value for the stated shares of stock, as follows    Common Stock Shareholder Chao 350 Iris Contribution Description $150,000 CASH and EQUIPMENT valued at $320,000  There is a $120,000 recourse loan on the equipment  INVENTORY valued at $500,000  No loans are attached to this asset LAND and BUILDING valued at $650,000 with a $400,000 nonrecourse mortgage  400  Nolan 250 At time of incorporation, Iris will receive 10 bonds ($100,000) as partial consideration for her inventory contribution Jasper Junction Corporation (JJC) is an accrual basis, calendar year entity that was created by Chao, Iris, and Nolan in 20X1  JJC furnishes the original incorporation agreement  The shareholders' bases in the assets contributed are as follows  Cash $150,000 Equipment $245,000 Inventory $380,000 Land and Building $375,000 The first five years of business have been lean years  Nolan had to loan the corporation $75,000 to ensure that JJC had enough cash to pay its bills and its Accumulated Earnings and Profits only amounts to $23,000 at the end of 20X5  JJC has its first year of substantial income in 20X6  It also sells some of its land for $100,000 cash, but the sale results in a capital loss  The Board of Directors decides to pay $250,000 in dividends to its shareholders  This is in addition to the $3,500 of interest it pays on the bonds and the $1 500 it pays to Nolan on the money he loaned JJC  The income and expenses of JJC for 20X6, taxable income and current E P are provided in the Table below  Corporate Agreement Taxable current Income ESP Amount 176,500 412,000 412,000 150,000 (150, 800) 133,000 133,000 1,888 1,eee Income Taxable Income Sales COGS Dividends (own 5 ) Muni Bond Interest Expenses Capital loss Interest Expense Operating Expenses Key Life Insurance Premiums Taxable income before Special Deductions Charitable contributions Dividend Receivable Deduction Taxable Income Federal Income Tax Current E P 32,935 (32,935) 5,000 (5,000) 120,080 (128, 880) 6,000 (6,800) 270,000 30,880 (27,880) (3,880) 66,500) 66,500 176,500 37,065 (37,665) 165,000 Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal formate distributions  (Decreases should be entered with a minus sign ) crir los poidle Agreeth Taxable Current Income E P Amount 176,500 412,000 412,000 150,000 (150,000) 133,000 133,000 1,000 1,000 Income Taxable Income Sales COGS Dividends (own 5 ) Muni Bond Interest Expenses Capital loss Interest Expense Operating Expenses Key Life Insurance Premiums Taxable income before Special Deductions Charitable Contributions Dividend Receivable Deduction Taxable Income Federal Income Tax Current E P 32,935 (32,935) 5,000 (5,000) 120,000 (120,000) 6,000 (6,000) 270,000 30,000 (27,000) (3,000) (66,500) 66,500 176,500 37,065 (37,065) 165,000 Analyze the information provided to reconcile the shareholders' beginning a consequences of JJC's corporate distributions  (Decreases should be entere Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal tax consequences of DC's corporate distributions (Decreases should be entered with a minus sign ) Shareholder Ownership Percentage ( 33  X 2 Chad 1 3 Answer is complete but not entirely correct  Beginning Increases Ending Basis in or Basis in Taxable Distributions Stock (Decreases) Stock (DividendsCapital Gains) $ 38,333 3 S 7,666 4 $375,666 3 5 Dividends $ 8 3333 6  Capital $ 10,978 gais $ 383,333 X s 7666 10 $375,666 11 Dividends $ 83,333 12  Capital $ 10,978 gains $ 383,333 15 7,667 16 $375,667 17 Dividends $ 83,333 18 Capital $ 10,978 gains Iris 7 33  XB   Nolan 13 34  14  CORPORATE AGREEMENT Jasper Junction Corporation This corporation agreement (the  Agreement ) made and entered into this 6 day of January, 20x1 (the  Execution Date ),   AMONGST  Chao of 693 Feather Street, Crane, North Dakota, 58585 Iris of 459 Wing Street, Crane, North Dakota, 58585 Nolan of 4455 Nest Street, Crane, North Dakota 58585 Individually the  Shareholder  and collectively the  Shareholders    BACKGROUND  The Shareholders wish to associate themselves as owners in the business  The terms and conditions of this Agreement set out the terms and conditions as to how they will be Shareholders  The firm name of the Corporation will be  JASPER JUNCTION CORPORATION  It will also be known as JJC and referred to in the remainder of this document as JJC  Purpose The purpose of JJC will be  MANUFACTURING Place of Business The principal location of the business of JJC will be at 9322 Flight Avenue, Crane, North Dakota, 58585 until such time that the corporation Board of Directors designates a different location  IN CONSIDERATION OF and as a condition of the Shareholders entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows  Formation By this Agreement the Shareholders enter into a corporation in accordance with the laws of the State of North Dakota  The rights and obligations of the Shareholders will be as stated in the applicable legislation of the State of North Dakota (the  Act ), except as otherwise provided here  Authorized common shares of JJC are 1 million  The par value of each share of common stock will be $100 00 and its fair value will vary based on the value of JJC  Each share of common stock will have the rights of one vote at shareholder meetings  Nonvoting stock is authorized to be issued with not more than 500,000 shares permissible  Common stock will be issued to the shareholders based on the net fair value contributed to the corporation Authorized preferred shares are 5,000 with a par value of $1,000 00 per share  No preferred shares will be issued at the time of incorporation, Bonds in valuation units of $10,000 may be issued    a       Governance The first shareholder meeting shall take place the first day of February, 20X1 and thereafter annually on the first day of February  Written minutes of the meetings must be available for shareholder review  A Board of Directors shall be established by a vote of the shareholders  The Board of Directors will appoint the officers and review their performance annually  Changes to the incorporation agreement must be approved by a 60  shareholder vote based on common stock voting rights          Distributions Subject to state law, the Board of Directors will declare dividends based on ownership as of a date the Board selects, and payment of the dividends must be within 30 days of such date  Distributions that would impair the manufacturing operations are not permitted  Dividends on common stock are not cumulative  Shareholders can force distributions by a 60  vote when there are excess liquid assets that have no valid business purpose for their accumulation     Capitalization Initial capitalization is provided by the initial Shareholders of Nolan, Chao and Iris  Each of the Shareholders has contributed to the capital of JJC in the form of cash or property in agreed  upon value for the stated shares of stock, as follows    Shareholder Common Stock Chao 350 Iris Contribution Description $150,000 CASH and EQUIPMENT valued at $320,000  There is a $120,000 recourse loan on the equipment INVENTORY valued at $500,000  No loans are attached to this asset LAND and BUILDING valued at $650,000 with a $400,000 nonrecourse mortgage 400  Nolan 250 At time of incorporation, Iris will receive 10 bonds ($100,000) as partial consideration for her inventory contribution

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4 Jasper Junction Corporation (JC) is an accrual basis, calendar year entity that was created by Choo, Iris, and Nolan in 20X1. JJC furnishes the

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