Question
Wineseller Corporation is owned by Mortimer Smith, its sole shareholder. Mortimer has a $20,000 basis in his Wineseller Corporation stock. Mortimer is in the 37%
Wineseller Corporation is owned by Mortimer Smith, its sole shareholder. Mortimer has a $20,000 basis in his Wineseller Corporation stock. Mortimer is in the 37% tax bracket. Wineseller Corporation is in the 21% tax bracket.
Wineseller Corporation has the following balances as of December 31, 2021.
- Accumulated Earnings and Profits (AEP) ($600,000)
- Current Earnings and Profits $ 70,000
On December 31, 2021, Wineseller Corporation distributes $160,000 to Mortimer.
- What are the tax consequences to Mortimer from receiving this distribution from Wineseller Corporation?
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Cost Accounting A Managerial Emphasis International
Authors: Charles T. Horngren, Srikant M. Datar, George Foster
11th Edition
8120323548, 978-8120323544
