Robin Corporation, a calendar year taxpayer, has a $580,000 positive balance in accumulated E & P as of January 1, Year 4. By December 31, Year 4, Robin has $60,000 positive current E&P. If Robin determines that a $700,000 distribution to its shareholders is appropriate at the beginning of Year 4, what is the maximum amount of the distribution that could potentially be treated as a dividend?
Read DetailsHannah, Greta, and Winston own the stock in Redpoll Corporation (E & P of $900,000) as follows: Hannah, 600 shares; Greta, 400 shares; and Winston, 1,000 shares. Greta is Hannah’s daughter, and Winston is Hannah’s brother. Redpoll Corporation redeems 400 of Hannah’s shares (basis of $55,000) for $240,000. Hannah purchased the stock three years ago as an investment. With respect to the stock redemption, Hannah has:
Read DetailsComplete the following. When a deficit exists in current E & P and a positive balance exists in accumulated E & P, the accounts ________ netted at the date of distribution. If the balance is __________, the distribution is a return of capital. If the balance is _________, the distribution is a dividend to the extent of the balance.
Read DetailsOrange Corporation distributes $200,000 in noncash property to each of its three shareholders: Sandy, Byron, and Fuchsia Corporation. When determining how the distribution is treated for tax purposes by Orange Corporation, which of the following factors should be considered?
Read DetailsComplete the following. When a deficit exists in current E & P and a positive balance exists in accumulated E & P, the accounts ________ netted at the date of distribution. If the balance is __________, the distribution is a return of capital. If the balance is _________, the distribution is a dividend to the extent of the balance.
Read Details