Under the alternative (E&P) depreciation method, the deduction would have been $60,000. The land’s fair market value was $75,000 and its tax and E&P basis to Volunteer was $25,000.Rocky assumed a mortgage attached to the land of $15,000.Its accumulated E&P at the beginning of the year was $200,000. How much of the $400,000 distribution is treated as a dividend to Boomer? What is Boomer’s tax basis in his Sooner stock after the distribution? What is Sooner’s balance in accumulated E&P on the first day of next year? [LO2] Blackhawk Company reports current E&P of negative $300,000.Sooner distributed $400,000 to its sole shareholder, Boomer Wells, on June 30 of this year. Its accumulated E&P at the beginning of the year was a negative $200,000. reported taxable income of $500,000 this year and paid federal income taxes of $170,000. reported taxable income of $1,000,000 this year and paid federal income taxes of $340,000. [LO2] Volunteer Corporation reported taxable income of $500,000 from operations for this year.What is the income tax imposed on the corporate income earned by Gopher and the income tax on the dividend distributed to Sven? [LO1] Bulldog Corporation reported taxable income of $500,000 this year before any deduction for any payment to its sole shareholder and employee, Georgia Brown.Bulldog chose to pay a bonus of $100,000 to Georgia at year-end.
Gopher paid a dividend of $100,000 to its sole shareholder, Sven Anderson.Practical in-class study problems facilitate self-discovery of technical tax knowledge along with the development of a variety of professional skills and attitudes.In this module, you will learn about corporate non-liquidating distributions.Tothe extent that a distribution by a corporation is not covered by currentor post-1913 earnings and profits, however, it is treated by§ 301(c)(2) as a return of capital to the shareholder, to be appliedagainst and in reduction of the adjusted basis of his stock.
If thedistribution exceeds the adjusted basis of the stock, the excess isordinarily taxed as capital gain, with an exception of minor importancefor distributions out of increase in the value of corporate propertyaccrued before March 1, 1913.
Georgia is subject to a marginal tax rate of 35% on the bonus.