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Alisiya [41]
4 years ago
7

At the beginning of the year, Myrna Corporation (a calendar year taxpayer) has E & P of $32,000. The corporation generates n

o additional E & P during the year. On December 31, the corporation distributes $50,000 to its sole shareholder, Abby, whose stock basis is $10,000. How is the distribution treated for tax purposes?
Business
1 answer:
kicyunya [14]4 years ago
8 0

Answer:

taxable gain of $8,000

Explanation:

accumulated earnings = $32,000

stock basis = $10,000

distribution = $50,000

taxable gain/loss = distribution - (accumulated earnings + stock basis) = $50,000 - ($32,000 + $10,000) = $50,000 - $42,000 = $8,000

Generally single owner corporations get pass-through tax treatment, meaning that the owners are taxed directly in a similar way to a sole proprietorship or partnership.

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Security A and Security B have similar risks. However, Security A has a higher rate of return than Security B. The return on Sec
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Answer:

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Explanation:

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3 years ago
When Tom wanted to buy a new gas grill, he searched for grills on the Internet. He was able to gather information on the latest
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Answer:

The correct answer is Information search

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Describe the overall purpose of management
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4 years ago
A company has a selling price of 1800 each for its printers. Each printer has a 2 year warranty that covers replacement of defec
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Answer:

$90,000

Explanation:

From the question above a company sells each of its printers for 1,800

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3 years ago
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