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rewona [7]
3 years ago
12

Rose has a $20,000 basis in the 60% of the Parent Corporation stock that she owns. Parent Corporation owns a 70% interest in Chi

ld Corporation. Parent and Child have current and accumulated E&P balances of $25,000 and $40,000, respectively. In return for $15,000, Rose sells 10% of the Parent Corporation stock to Child Corporation. What is the impact of the transaction on Rose?
Business
1 answer:
Degger [83]3 years ago
7 0

Answer:

The answer is: Rose will be taxed as receiving a $15,000 dividend distribution.

Explanation:

Since Parent Corporation owns 70% of Child Corporation, for tax purposes they are considered as one single firm. Rose is the main stockholder of Parent Co. so for tax purposes she is also a stockholder in Child Co. When Child Co. gives her $15,000 in exchange for Parent Co. stock, this would be considered as a dividend distribution rather a stock sale.

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Milo decides to invest $1,500 in a savings account every year at the beginning of the year for 10 years. Assuming an interest ra
irina1246 [14]

Answer:

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Explanation:

For this question, we use the Future value formula that is shown on the attachment below:

Provided that,  

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4 0
2 years ago
A company has $1,378 in inventory, $4,827 in net fixed assets, $664 in accounts receivable, $298 in cash, $626 in accounts payab
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Given

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4 0
3 years ago
A company developed the following per-unit standards for its product: 2 gallons of direct materials at $8 per gallon. Last month
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Answer:

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3 years ago
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