Question
Flintstone Company is owned equally by Fred Stone and his sister Wilma, each of whom hold 3,500 shares in the company. Wilma wants to reduce
Flintstone Company is owned equally by Fred Stone and his sister Wilma, each of whom hold 3,500 shares in the company. Wilma wants to reduce her ownership in the company, and it was decided that the company will redeem 505 of her shares for $26,400 per share on December 31 of this year. Wilmas income tax basis in each share is $8,150. Flintstone has current E&P of $10,650,000 and accumulated E&P of $50,880,000.
b. What is Wilmas income tax basis in the remaining 2,995 shares she owns in the company?
Flintstone Company is owned equally by Fred Stone and his sister Wilma, each of whom hold 3,500 shares in the company. Wilma wants to reduce her ownership in the company, and it was decided that the company will redeem 505 of her shares for $26,400 per share on December 31 of this year. Wilmas income tax basis in each share is $8,150. Flintstone has current E&P of $10,650,000 and accumulated E&P of $50,880,000.
b. What is Wilmas income tax basis in the remaining 2,995 shares she owns in the company?
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Fundamental Financial Accounting Concepts
Authors: Thomas P. Edmonds
11th Edition
1260786587, 9781260786583
