AC553_W5_Assignment_Solution - Week 5 Assignment Answers...

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Week 5 Assignment Answers 14-24 The purpose of the dividends-received deduction is to reduce the effect of multiple taxation that takes place when corporations are receiving dividend income. Only dividends received from domestic corporations subject to the corporate income tax are eligible for the dividends-received deduction. 14-51 Schedules M-1 and M-3 reconcile net income from the company’s books (i.e., book income) to taxable income by starting with book income and showing all the adjustments necessary to arrive at taxable income. This reconciliation is necessary because companies record certain income and expense items in their books for financial recordkeeping purposes (i.e., for purposes of reporting company performance to shareholders or for making management decisions) in a manner that is not allowed under prevailing income tax laws. 14-52 a. No gain is recognized since the transaction qualifies under Code Sec. 351. Sam's basis in the stock is $15,000, the same as his basis in the property transferred to the
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This note was uploaded on 02/21/2012 for the course ACCOUNTING 553 taught by Professor James during the Spring '12 term at DeVry Phoenix.

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AC553_W5_Assignment_Solution - Week 5 Assignment Answers...

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