Comp SM_Ch19 - CHAPTER 19 CORPORATIONS: DISTRIBUTIONS NOT...

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CHAPTER 19 CORPORATIONS: DISTRIBUTIONS NOT IN COMPLETE LIQUIDATION SOLUTIONS TO PROBLEM MATERIALS Status: Q/P Question/ Present in Prior Problem Topic Edition Edition 1 Taxation of corporate distributions Unchanged 1 2 Definition of earnings and profits Unchanged 2 3 Unchanged 3 and income tax 4 Effect of distribution, taxable dividend or return Unchanged 4 of capital, in selected situations 5 Planning corporate distributions: beginning or end Unchanged 6 of tax year 6 Rationale for reduced tax rate on dividends New 7 Requirements for qualified dividend tax rates New 8 Purpose of property dividend versus cash dividend Unchanged 7 9 Property distribution: choice of property Unchanged 8 10 Issue ID Unchanged 9 11 Impact of liabilities on tax treatment of property Unchanged 10 distributions 12 Issue ID Unchanged 11 13 Issue ID Unchanged 12 14 Selected factors in determining reasonableness of Unchanged 13 compensation 15 Choice between dividend and deductible payment New 16 Unreasonable compensation Unchanged 15 17 Preference for qualifying versus nonqualified New stock redemption 18 Issue ID Unchanged 16 19 Sale of exchange versus dividend treatment on Modified 17 redemption 19-1
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19-2 2005 Comprehensive Volume/Solutions Manual Status: Q/P Question/ Present in Prior Problem Topic Edition Edition 20 Basis of property received in a qualifying stock Unchanged 18 redemption 21 Family members included as “related parties” In Unchanged 20 attribution rules 22 Attribution from and to a corporation New 23 Requirements for a not essentially equivalent redemption Unchanged 23 24 Basis of stock in a nonqualified stock redemption Unchanged 22 25 Requirements for a disproportionate redemption Unchanged 24 26 Redemption to pay death taxes: attribution rules Unchanged 25 27 Redemption to pay death taxes: 35% test Modified 26 28 Issue ID Unchanged 27 29 Gain/loss recognition to corporation on redemption Unchanged 28 distribution 30 Amount of dividend income Unchanged 29 31 Modified 30 32 Unchanged 31 method; taxation of dividend distribution 33 Cash distributions; determination of taxable amount Unchanged 32 34 Cash distributions; determination of taxable amount; Unchanged 33 gain on sale of stock 35 Cash distributions; determination of taxable amount Unchanged 34 36 New 37 Effect of specified transactions on taxable income; Unchanged 36 38 Tax treatment to individual shareholder and to New distributing corporation of property subject to a liability 39 Unchanged 38 balance but corporation has current loss 40 Issue ID Unchanged 40 41 Constructive dividends Unchanged 41 42 Property distribution to corporate shareholder; basis Unchanged 42 in excess of FMV; liability assumed by shareholder 43 Unchanged 43 44
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Comp SM_Ch19 - CHAPTER 19 CORPORATIONS: DISTRIBUTIONS NOT...

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