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he Shield Corporation has two shareholders, Peg and Nick. The basis of Peg s 6 0 0 shares, which she acquired in 2 0 1
he Shield Corporation has two shareholders, Peg and Nick. The basis of Pegs shares, which she acquired in is $ The basis of Nicks shares, which he acquired in is $ Peg and Nick are unrelated.
The Shield Corporation has owned and operated two businesses since Its accumulated earnings and profits as of January were $ In the two businesses earned taxable income of $ and current earnings and profits before federal income tax of $ On December the corporation sold one of its businesses for $ resulting in a $ gain that is not included in the taxable income or earnings and profits amounts shown above. It retained the other business, the net assets of which had a fair market value of $ The corporation used the $ proceeds from the sale to redeem some stock of Peg and Nick. It paid $ to Peg for of her shares and $ to Nick for of his shares. a Compute the Shield Corporations taxable income for the year ended December
b Compute the corporate income tax of Shield Corporation for the year ended December
c Compute the Shield Corporations current earnings and profits for the year ended December
d Determine the amount of the income recognized by Peg as a result of the redemption.
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