Answer:
ok I'll give you what I know monopolies are one business operating so try and use that
Answer:
The long term capital gain= $30000-$25000
The long term capital gain= $5000
The basis in stock will be zero after the distribution.
Explanation:
Step 1 of 3
Tax treatment of amount distributed to shareholders:
The amount received as distribution to a shareholder under S Corporation is equal to the cash and fair market value of property distributed. The distribution is considered as tax-free to the limit that it does not exceed shareholder’s basis in the company’s stock. Any amount received in excess of basis will be treated as capital gain.
Step 2 of 3
However, taxation depends whether S Corporation has ever been a C Company or it posses’ accumulated earnings and profits. If it was never a C Corporation or doesn’t holds AEP then distribution equals to basis of share in S Corporation is a tax free gain for shareholder. Gain over and above basis is taxed as capital gains.
Step 3 of 3
In the given problem, C is a shareholder in S Corporation. He receives $30,000 as cash distribution. His basis in stock is $25,000. The distribution up to basis of stock is tax free distribution and above that is charged to capital gains. It is as follows-
Thus, capital gain of is taxable in hands of C. His basis in S Corporation will reduced to zero as entire distribution is over and above basis of his stock.
D. Demand is greater than supply
Answer:
3.44%
Explanation:
The computation of the return if sold the fund at the year end is shown below:
= {[Price × (1 - Front End Load) × ((1 + fund increase percentage) -expense ratio)] - price} ÷ price
={[$20 per share × (1 - 5.75%) × ((1 + 11%) - 1.25%)] - 20} ÷ 20
= 3.44%
We simply applied the above formula so that the correct return could come
Answer:
The answer is $750 millions
Explanation:
After recapitalization, the Weight of Debts of Nichols Corporation is 25%. Hence, its Weight of Equity Capital is: 100% - 25% = 75%.
The formula of Value of Operations as follows:
Value of Operations = Weight of Debts x Value of Debts + Weight of Equity Capital x Value of Equity Capital
Because Nichols Corporation's value of operations is equal to $600 million after recapitalization, we have the following equation with S as the value of equity after the recap:
600 = 25% x 150 + 75% x S
=> S = (600 - 25% x 150) / 75% = 750