C11-Chp-00-Tst-2-Exm-Prb-2011-Nite-Post-2012

C11-Chp-00-Tst-2-Exm - Page 1 of 5 Accounting 6120 Corporate Taxation Examination No 2-Night Class Spring 2011 The University of North Carolina at

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Accounting 6120. Corporate Taxation – Examination No. 2-Night Class Spring, 2011. The University of North Carolina at Charlotte Name ________________________________________________ Row In Class __________ Instructions : You may use your code and regs book during the test. You may also use up to 4 pages of notes-front and back, as well as any outlines of code provided by the instructor in class or on the web page. You may not use your regular tax textbook when answering questions on this test. Avoid all appearances of impropriety. 1 [ §301] Charlotte Corporation is a calendar year corporation which had accumulated earnings and profits of $32,000 as of January 1, 2011. Charlotte Corporation had a deficit in earnings and profits for 2011 of $100,000 and distributed $15,000 to one of its shareholders, John, on April 1, 2011. The adjusted basis of John's stock before the distribution was $2,000. What is the amount of John's dividend income and capital gain from this distribution? Dividend Income Capital Gain a. $-0 $15,000 b. $12,000 $3,000 c. $12,000 $1,000 d. $7,000 $6,000 2 [ §301] Barrel Corporation which had earnings and profits of $40,000, made a nonliquidating distribution of property to its sole shareholder as a dividend in kind. This property had an adjusted basis of $20,000 and a fair market value of $30,000 at the date of distribution. There was no debt on the property. How much dividend income does the shareholder recognize on this distribution? a. $40,000 b. $30,000 c. $20,000 d. $10,00 0 3 [ §305] Jane purchased 100 shares of Smith Corp. common stock on June 1, 1990, for $7,700. On June 30, 2011, she received a 10% stock dividend from Smith Corp. (ten shares of Smith Corp. common stock). Jane did not have an option of receiving cash rather than stock. On September 1, 2011, she sold 10 shares of Smith Corp. common stock for $1,000. As a result of these transactions she should report gain for 2011 of: a. $300 b. $400 c. $1,000 d. $5,000 e. Other 4 [ §311] Rally Corporation distributed a sailboat to its sole shareholder, Ms. H. The sailboat had a fair market value of $175,000 and an adjusted basis to Rally of $150,000. The sailboat was subject to a loan of $190,000, which Ms. H assumed. What is the amount of Rally's gain or (loss) on the distribution? a. ($15,000) b. $0 c. $25,000 d. $40,000 e. Other 5 The following information pertains to Green Corp.: Deficit in accumulated earnings and profits at January 1, 2011 ($120,000) Earnings and profits for the year ended December 31, 2011 160,000 Cash distributions to individual stockholders during 2011 360,000 What is the total amount of distributions taxable as dividend income to Green's stockholders in 2011? a.
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This note was uploaded on 03/09/2012 for the course ACCT 6120 taught by Professor Godfrey,h during the Spring '08 term at UNC Charlotte.

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C11-Chp-00-Tst-2-Exm - Page 1 of 5 Accounting 6120 Corporate Taxation Examination No 2-Night Class Spring 2011 The University of North Carolina at

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