Elm Corp. is an accrual-basis, calendar-year C corporation with 100,000 shares of voting common stock issued and outstanding as of December 30, Year 1. On December 31, Year 1, Hall surrendered 2,000 shares of Elm stock to Elm in exchange for $33,000 cash. Hall had no direct or indirect interest in Elm after the stock surrender. Additional information follows:Hall’s adjusted basis in 2,000 shares of Elmon December 31, Year 1 ($8 per share)$16,000Elm’s accumulated earnings and profits atJanuary 1, Year 125,000Elm’s Year 1 net operating loss(7,000)What amount of income did Hall recognize from the stock surrender? $17,000 capital gain.This answer is correctIn the case of a stock redemption in complete liquidation of a shareholder’s interest, the redemption is treated as a sale or exchange of a capital asset. Therefore, Hall’s income from the redemption is a $17,000 capital gain ($33,000 – $16,000 basis). . Company A has property in two states that both use the UDITPA formula for apportioning business income.Location ofPropertyAcquisition Cost: Beg./End ofYearRent ExpenseState 1$150,000/$250,000$0State 2$0$10,000What are the property factors for Company A in States 1 and 2? .
State 1:State 2:Which of the following is not a requirement for a distribution to be treated as a partial liquidation of a corporation? .
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- Fall '17
- Dan Ward
- Accounting, fair market value