WEST CH 5 SOLUTIONS (2007)

WEST CH 5 SOLUTIONS (2007) - CHAPTER 5 CORPORATIONS:...

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CHAPTER 5 CORPORATIONS: EARNINGS PROFITS AND DIVIDEND DISTRIBUTIONS SOLUTIONS TO PROBLEM MATERIALS Question/ Problem Topic Status: Present Edition Q/P in Prior Edition *1 Taxation of corporate distributions Unchanged 1** 2 Definition of earnings and profits Unchanged 2** 3 Effect of selected transactions in adjusting Unchanged 3** 4 income tax Unchanged 4** 5 Effect of selected situations in adding to or Unchanged 5** 6 Effect of distribution, taxable dividend or return of capital, in selected situations Unchanged 6** 7 Planning corporate distributions: beginning or end of tax year Unchanged 7** 8 Rationale for reduced tax rate on dividends Unchanged 8** *9 Factors affecting tax treatment of distribution Modified 14** 10 Requirements for qualified dividend tax rates Unchanged 9** 11 Purpose of property dividend versus cash dividend Unchanged 10** 12 Property distribution: choice of property Unchanged 11** 13 Effect of property dividend on distributing corporation Unchanged 12** 14 New 15 Necessity of dividend distribution to meet state legal requirements in determining tax treatment Unchanged 15** *16 Reasonable compensation and constructive dividends Unchanged 16** 17 Selected factors in determining reasonableness of compensation Unchanged 17** 18 Choice betweendividend and deductiblepayment Modified 18** 19 Unreasonable compensation Unchanged 19** 20 Unreasonable compensation; ways to draw funds from corporation Modified 20** 5-1
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Question/ Problem Topic Status: Present Edition Q/P in Prior Edition 21 Election to receive common or preferred stock dividend Unchanged 21** 22 Rationale underlying tax treatment of stock distributions Unchanged 22** 23 Explain tax effects of nontaxable stock rights; taxable stock rights Unchanged 23** 24 Amount of dividend income Unchanged 24** 25 Unchanged 25** 26 method; taxation of dividend distribution Unchanged 26** *27 New *28 Effect of specified transactions on taxable income; on New *29 Effect of specified transactions on taxable income; on Modified 42** 30 Unchanged 27** 31 Modified 43** 32 Modified 44** 33 Modified 45** *34 Cash distributions; determination of taxable amount Unchanged 28** 35 Cash distributions; determination of taxable amount Unchanged 29** 36 Choosing low tax on dividend or investment interest expense deduction Unchanged 32** 37 Holding period requirement for qualified dividend New 38 Property distribution; effect of gain, loss, liability, and differing basis Unchanged 33** 39
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WEST CH 5 SOLUTIONS (2007) - CHAPTER 5 CORPORATIONS:...

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