C12-Chp-05-1C-Class-Plan-Prb-and-Sol-2012-0131

C12-Chp-05-1C-Class-Plan-Prb-and-Sol-2012-0131 - Chap-5-Tab...

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Unformatted text preview: Chap-5-Tab 1 c563f3197252095de3d916467f9383a7b531f434.xls Page 1 of 6 No. Chapter 5. Corporations: Earnings & Profits and Dividends - Tab 1 H-W Txt Sec. Sub 1 Basic Information for Betty Jane (BJ) and her new "C" corporation (BJ Corp.) 1011 On 1-1-11, BJ invested these assets in BJ Corporation & received 100% of the stock. 1012 Basis FMV [BJ received Land $60,000 $100,000 1,000 shares of Other assets $200,000 $200,000 common stock] Total assets $260,000 $300,000 4-11 351 a 2 Corporation had the following income and expense on its Form 1120 for 2011: Revenue $400,000 61 [Not a personal Salary to BJ (a reasonable salary) ($100,000) 162 service corp.] Other expenses, except taxes ($235,000) 162 North Carolina Income Taxes ($5,000) 164 Subtotal $60,000 63 Federal Income Taxes 11 Net income after taxes 5-3 Interest on NC bonds (not included above) $20,000 5, 6 5-3 1.312 - 6 b Earnings and profits at end of first year? Note: the following cases are independent, except where noted. 3 Amount of distributions to shareholder by BJ Corporation in 2011 $0 What is BJ's basis in her BJ Corporation stock at 12-31-11? [Sec. 1012] 358 a 1 "Total income" BJ reports from BJ Corporation for 2011? 61 Balance in BJ Corporation's Earnings & Profits at 12-31-2011? 312 Would life insurance proceeds of $10,000 increase Earnings and Profits? 5-3 1.312 - 6 b May you reduce corporate E&P by adopting accelerated depreciation? 5-5 312 k 4 In 2011, BJ received a distribution from BJ Corporation of CASH: $40,000 Dividend income BJ reports from BJ Corporation for 2011? 2 5-3 301 c 1 Does it matter whether dividend was paid in January or December? What federal income tax rate applies to her dividend income for 2011? 5-12 1 h 3 B Balance in BJ Corporation's Earnings & Profits at 12-31-2011? 5-3 312 a 1 BJ's basis in her BJ Corporation stock at 12-31-11? 1012 5 BJ received a distribution of 100 shares of corp. stock with value of $30,000 Dividend income BJ reports as result of receiving the stock? 5-18 305 BJ's TOTAL BASIS in the 100 shares received from BJ Corp? 1.307-1(a) 22, 23 5-19 307 Increase or decrease in E&P as a result of the stock dividend? 5-19 1.312 - 1 d Chap-5-Tab 2 c563f3197252095de3d916467f9383a7b531f434.xls Page 2 of 6 No. Chapter 5. Corporations: Earnings & Profits and Dividends- Tab 2 H-W Txt Sec. Sub 1 On 1-1-11, BJ invested assets in a C corp. & received 100% of the stock. 1012 BJ's basis in corp. stock was the same as her basis in the assets invested: $260,000. See Tab 1 (No. 1 and 2) for complete details. Note: the following cases are independent, except where noted. 6 In 2011, BJ received distribution from BJ Corporation of CASH: $80,000 3, 4, 7 Amount of this distribution to BJ that is a return of capital?...
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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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C12-Chp-05-1C-Class-Plan-Prb-and-Sol-2012-0131 - Chap-5-Tab...

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