C11-Chp-00-Tst-2-Exm-Sol-2011-Nite - 5. Distributions

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5. Distributions 68fe3c8deafe4b28e7864becba67f4613eced649.xls Page 1 of 4 No. Ans Pg Code 1 D Michael Corporation $32,000 Deficit for entire year (100,000) Fraction of year that is past on dividend date 25% Current Deficit on date of dividend (25,000) 7,000 Dividend Amount of cash distributed 15,000 8,000 Adjusted basis of stock (amount of return of capital) (2,000) Ret. of Capital Capital Gain $6,000 Cap. Gain 2 B The amount of a property dividend is its FMV. 3 A Smith Company - Stock Dividend Homework Test Cost of shares $6,600 $7,700 Number of shares purchased 100 100 Cost per share $66 $77 Stock Dividend received- No. of shares 10 10 Revised total number of shares 110 110 Revised basis per share $60 $70 Shares sold 50 10 Cost of shares sold $3,000 $700 Selling Price 5,000 1,000 Gain $2,000 $300 4 D 311(b) Rally Corporation 336(b) FMV is assumed to be equal to mortgage, if mortgage debt exceeds basis. FMV of property distributed $175,000 Debt on property distributed, assumed by SH 190,000 Basis of property distributed 150,000 Gain $40,000 5 B 301 The following information pertains to Green Corp.: 316 What total amount is taxable as dividend income to Green's SH? Deficit in AE&P at January 1, 2009
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C11-Chp-00-Tst-2-Exm-Sol-2011-Nite - 5. Distributions

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