835 IRC assignment.docx - Xiaomin Zhang ACCT 835 CODE SUMMARY ASSIGNMENT Write a summary of the following Internal Revenue Code Section Sec 301 26 U.S

835 IRC assignment.docx - Xiaomin Zhang ACCT 835 CODE...

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Xiaomin Zhang ACCT 835 CODE SUMMARY ASSIGNMENT Write a summary of the following Internal Revenue Code Section: Sec. 301 26 U.S. Code Section 301 are the rules applicable with respect to distributions of property. 1. Meaning of property For purposes of this part, the term “property” means money, securities, and any other property, but does not include stock or rights to acquire stock. 2. Distribution amount Generally, the amount of distribution is the amount of money received, plus the fair market value of the other property received. Fair market value is determined as of the date of the distribution. If there is any liability involved, the amount of distribution is reduced by (1) the amount of liability of the corporation assumed by shareholder and (2) the amount of liability of the property received by the shareholder. 3. Taxable amount Dividend distribution is included in the gross income. None-dividend distribution reduces the adjusted basis of the stock, and it is treated as gain if it exceeds the adjusted basis of the stock.
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Unformatted text preview: Exception for none-dividend distribution, to the extent that it exceeds the adjusted basis of the stock and to the extent that it is out of increase in value accrued before March 1, 1913, is tax exempt. 4. Basis Xiaomin Zhang The basis of the property received in a distribution is its fair market value. 5. Special rule for certain distributions received by 20 percent corporate shareholder (1) In general For the purposes of determining the taxable income of any 20 percent corporate shareholder, section 312 shall be applied with respect to the distributing corporation as if it did not contain subsections (k) and (n) thereof. (2) Who is 20 percent corporate shareholder Shareholder which owns at least 20 percent of the total combined voting power of all classes of stock entitled to vote or at least 20 percent of the total value of all stock of the distribution corporation....
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