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.
Answer: Statement A
Explanation: Convertible bonds is a type of bond security which gives its holder the right to convert each bond to a specified number of shares. These are hybrid securities having features of both equity and debt.
.
Warrants are securities that give their holder the right to purchase the common shares of the company at a specified price and before a certain time period.
.
Thus, from the above explanation we can conclude that statement A is correct.
Answer:
Explanation:
So, the hypothesis is:
H0 : p = .48 versus Ha : p≠ .48
check the picture attached for more explanation
<u>Answer</u>:
<u>True</u>
Explanation:
Indeed, the economics student was mistaken because aggregate demand <em>follows a pattern</em> that when prices rise, consumer wealth declines, the interest rates rise, and exports become more expensive thus leading to a downward sloping of the aggregate demand curve.
Therefore, the second statement is correct (True) for saying the economics student was wrong in his statement.
Explanation:
I do not think that is true even considering a linear cost of every 4 pairs of shoes
