During 2013, an S corporation incurs the following transactions.
Net income from operations
Interest income from savings account
Long-term capital gain from sale of securities
Short-term capital loss from sale of securities
Corporate shareholders receive more favorable tax treatment from a qualifying stock
redemption than from a nonqualified stock redemption.
A corporation distributes property (fair market value of $10,000; basis of $7,000) to a
Michael and Freddy form Willow Corporation. Michael transfers property (basis of
$175,000 and fair market value of $100,000) while Freddy transfers land (basis of
$50,000 and fair market value of $90,000) and $10,000 in cash. Each receives 50
Assume taxable income is the starting point for computing E & P. During 2008, Moscow
Corporation made a charitable contribution of $100,000. Of this amount $10,000 could
not be deducted in arriving at Moscow's taxable income for 2008 because