Question
Pink Corporation is a calendar year taxpayer. Pete owns one-third (100 shares) of Pink stock. His basis in the stock is $25,000. Cheryl owns two-thirds
Pink Corporation is a calendar year taxpayer. Pete owns one-third (100 shares) of Pink stock. His basis in the stock is $25,000. Cheryl owns two-thirds (200 shares) of Pink stock. Her basis in the stock is $40,000. On June 10 of the current year, Pink distributes $40,000 to Pete and $80,000 to Cheryl.
A. Determine the tax consequences of the cash distributions to Pete and Cheryl if current E&P is $60,000 and accumulated E&P is $100,000.
| Pete | Cheryl | |
| Distribution | ||
| Dividend income | ||
| Remaining distribution | ||
| Return of capital | ||
| Capital gain (loss) | ||
| Remaining stock basis |
B. determine the tax consequences of the cash distributions to Pete and Cheryl if current E&P is $36,000 and accumulated E&P is $30,000.
| Pete | Cheryl | |
| Distribution | ||
| Dividend income | ||
| Remaining distribution | ||
| Return of capital | ||
| Capital gain (loss) | ||
| Remaining stock basis |
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Cost Accounting And Financial Management For Construction Project Managers
Authors: Len Holm
1st Edition
1138550655, 978-1138550650
