The correct answer is work specialization. This is also
known as division of labor in which this is being referred in regards with the
degree of an organization that are likely to have a division of individual task
into separate jobs.
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.
The project must demonstrate,
one, the problem you are trying to solve. Two, the solution of the problem, how
innovative it is and compelling. Three, what did you learn throughout the
project. Four, accuracy of the conclusion of the project. And lastly, how were
you able to effectively present and demonstrate the project to your audience.
payable = money owed by a company to its creditors
receivable = money owed to a company by its debtors.
