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Corporations - Earnings & Profits, & Dividend Distributions - Ch10

Corporations - Earnings & Profits, & Dividend Distributions - Ch10

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CHAPTER 10 CORPORATIONS: EARNINGS & PROFITS AND DIVIDEND DISTRIBUTIONS SOLUTIONS TO PROBLEM MATERIAL Status: Q/P Question/ Present in Prior Problem Topic Edition Edition 1 Amount of dividend income Unchanged 1 2 Amount of taxable income; balance in E & P Unchanged 2 3 Ethics problem Unchanged 3 4 Deficit in E & P followed by sale on Unchanged 4 installment method; taxation of dividend distribution 5 Effect of selected transactions in adjusting Unchanged 5 taxable income (for determining E& P) 6 Amount of dividend income; deficit in current Unchanged 6 E & P with positive balance in accumulated E & P 7 Cash distributions; determination of taxable Unchanged 7 amount 8 Cash distributions; determination of taxable Unchanged 8 amount; gain on sale of stock 9 Cash distributions; determination of taxable Unchanged 9 amount 10 Effect of specified transactions on Unchanged 10 taxable income; on E & P 11 Effect of specified transactions on taxable Unchanged 11 income; on E & P 12 Tax treatment to shareholder and to New corporation on distribution of property subject to liability in excess of basis 13 Effect of specified transactions on taxable New income; on E & P 14 Tax treatment to corporate shareholder and to Unchanged 13 distributing corporation of property subject to a liability 10-1
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10-2 2003 Entities Volume/Solutions Manual Status: Q/P Question/ Present in Prior Problem Topic Edition Edition 15 Taxation of dividend when E & P has positive Unchanged 14 balance but corporation has current loss 16 Unreasonable compensation, ways to draw New 15 funds from corporation 17 Issue recognition Unchanged 17 18 Constructive dividends Unchanged 18 19 Selected factors in determining reasonableness Unchanged 19 of compensation 20 Property dividend; liability assumed by share- Unchanged 20 holder; determination of E & P; distribution of loss property 21 Property distribution to corporate Unchanged 21 shareholder; basis in excess of FMV; liability assumed by shareholder 22 Dividend distribution; effect on E & P Unchanged 22 23 Dividend distribution; effect on E & P New 24 Basis of nontaxable preferred stock dividend New 25 Election to receive common or preferred Unchanged 24 stock dividend 26 Stock dividend; basis allocation; gain or sale Unchanged 26 27 Stock rights; basis allocation; gain on sale Unchanged 27 28 How to structure a dividend payment Unchanged 28 29 Meaningful reduction test in a not essentially Unchanged 29 equivalent redemption 30 Disproportionate redemption; consequences Unchanged 32 to shareholder and effect of redemption on E & P 31 Redemption of stock to pay death taxes; Unchanged 31 estate sale of property received 32 Disproportionate redemption [[§ 302(b)(2)]; Unchanged 30 family attribution 33 Complete termination redemption New [§ 302(b)(3)]; family attribution waiver Bridge Discipline Problem 1 Total return and dividend yield of corporate Unchanged 1 stock Research Problem 1 Earnings and profits and tax evasion Unchanged 1 2 Repayment of unreasonable compensation Unchanged 2 3 Dividend in anticipation of corporate sale Unchanged 3 4
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