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Unformatted text preview: Deduction of required payments are not allowed for neither the corporation nor its shareholders. Question 38: The portion of corporate debt transferred to the shareholder as a result of his investment increase his adjusted basis of his capital account. A shareholder’s basis includes his basis in the company’s stock and the company’s debts. When distributions are made, stock basis is reduced first, but not below zero. Any excess distribution will reduce the shareholder’s basis in the company’s debt. Problem 51: The latest date to apply is the 15 th day of the third month following the tax year-end. In this case, Damion must apply before September 8, 2008. Problem 63: The amount of less deductible is calculated as follows: 300,000 x 1/3 x 30% = $30,000...
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- Spring '08
- Corporation, S corporation, Code Sec., CCH Federal Taxation, Herbawi AC553 Assignment