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C12-Chp-05-1D-Dividends-EXCEL-Prb-and-Sol-2012

C12-Chp-05-1D-Dividends-EXCEL-Prb-and-Sol-2012 -...

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Pg-1-Distribution-Part-1 b5b11762660c31f50c2d0ab7d49cb827ce1f3983.xls Page 1 of 5 Citation Page No Note: all corps are C corps unless other information is given. Amounts in thousands After tax income = E&P for the year Case 1 Case 2 Case 3 Case 4 1 Bob's investment to start Co. 01/01/11 $500 $500 $500 $500 Net Income 2011 $600 $600 $600 $600 Federal income tax 2011 ($200) ($200) ($200) ($200) Net income after tax 2011 $400 $400 $400 $400 301 Cash distribution 12/31/11 $0 $200 $500 $1,000 316 Div. Income for Shareholder 12/31/11 301 c 2 Capital gain for Shareholder 12/31/11 301 c 3 Stock basis of Shareholder 12/31/11 E & P - end of year 12/31/11 1363, 1366, 1367 Stock basis of SH (if S Corp)? 12/31/11 Assume in Case 2 above that dividend was paid on April 1, 2011? Div. Income for Shareholder Same After tax income = E&P for the year Case 5 Case 6 Case 7 Case 8 2 Bob's investment to start Co. 01/01/11 $500 $500 $500 $500 Net Income (loss) after tax 2011 $600 ($600) $600 ($100) Net Income (loss) after tax 2012 $400 $400 ($400) ($100) Cash distribution 12/31/12 $1,000 $1,000 $1,000 $1,000 Div. Income for Shareholder 12/31/12 Capital gain for Shareholder 12/31/12 Stock basis of Shareholder 12/31/12 Assume dividend is paid on 09/30/12 Div. Income for Shareholder Capital gain for Shareholder
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Pg-2-Distribution-Part-2 b5b11762660c31f50c2d0ab7d49cb827ce1f3983.xls Page 2 of 5 Citation Page No Note: all corporations are C corporations unless other information is given. 3 Charlotte Corp [No State Income Tax] Amounts in thousands Fill in missing amounts (underlined) GAAP Tax E & P AMT Sales $200 $200 $200 1.312-6 b Municipal bond interest 12 Dividends received (10% owned) 10 Total Revenue 222 Compensation 80 80 80 Meals and entertainment (Gross) 20 10 20 312 k Depreciation expense - Straight-Line 53 53 53 Other Deduction Total Expenses (Deduct) 153 Net Income before taxes $69
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