week 7 .docx - 28-54 2019 Edition 28 a All the cash that...

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28-54 2019 Edition 28. a. All the cash that Larry received will be taxed as capital gains or ordinary income. b. The profit from sales of stock will taxed by a lower rate than all other taxable income. For example, the tax rate for sale of stock will be 5% if Larry is in the 15% percent tax bracket. c. The profit from sales will be taxed as capital gain at maximum 15% tax rate. d. The profit from sales of stock will be taxed as capital gain at maximum 15% tax rate. 30. The maximum loss can be used to offset its taxable income for 2018 is the lower of taxable income or carry forward loss, which equal to 480,000. 32. Hall Corp must recognize 2 million. 34. The stock portfolio is seven years old, then the distribution will be taxed as dividend. 36. a. Kelly will realize 50,000 + 100,000 = 150,000. However, the fair market value is equal to Munro stock, so there is no realized gain. b. The tax basis for the preferred stock equal to $50,000, and the tax basis of common stock is equal to $100,000. However, Kelly does not have any tax liability because there is no realized gain.
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38. Hall corporation will realize gain of $1,000,000 after stock redemption.
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