Regulation 3 PassMaster Questions

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Unformatted text preview: nal Development Corp. All rights reserved. Maxixishere Pdf Collection Becker CPA Review, PassMaster Questions Lecture: Regulation 3 Choice "c" is correct. Distributions out of the sum of current and accumulated earnings and profits are taxable as dividends to the recipients. Accumulated E&P at 1/1/94 Earnings in 1994 Taxable dividends to recipients Excess distributed Total distributed $ 120,000 160,000 $ 280,000 80,000 $ 360,000 Any excess reduces the shareholder's basis in Dahl stock, and any amount beyond that required to reduce the shareholder's basis to zero is treated as received on the sale or exchange of the stock and is capital gain. Choices "a", "b", and "d" are incorrect, per the above calculation and explanation. CPA-02075 Type1 M/C A-D 28. CPA-02075 ARE Nov 95 #21 Corr Ans: C PM#38 R 3-01 Page 4 Clark and Hunt organized Jet Corp. with authorized voting common stock of $400,000. Clark contributed $60,000 cash. Both Clark and Hunt transf...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.

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