Tax Accounting Review

Tax Review 1) Pet Corporation, a calendar year C corporation, received a dividend of $62,000 from Nania Corporation. Pet owns 30% of the Nanja Corporation stock. Assuming it is not subject to the taxable income limitation, what is the actual taxable amount of the dividend received by Pet? 2) ABC Corporation distributes investment securities to each of its individual shareholders. The total basis of these securities is $60,000 and the total fair market value of them is $90,000. However, these securities were used as collateral for a loan to the corporation and $30,000 of that loan still encumbers the securities and is assumed by the shareholders. How much is the dividend income to the shareholders? 3) ABC Corporation distributes investment securities to each of its individual shareholders. The total basis of these securities is $60,000 and the total fair market value of them is $90,000. However, these securities were used as collateral for a loan to the corporation and $30,000 of that loan still encumbers the securities and is assumed by the shareholders. How much is the shareholders' total basis in the securities received