QuickHelper

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About QuickHelper

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Teaching Since: May 2017
Last Sign in: 356 Weeks Ago, 1 Day Ago
Questions Answered: 20103
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Education

  • MBA, PHD
    Phoniex
    Jul-2007 - Jun-2012

Experience

  • Corportae Manager
    ChevronTexaco Corporation
    Feb-2009 - Nov-2016

Category > Accounting Posted 12 Aug 2017 My Price 8.00

Simple Tax Question

At the beginning of the year, Jenny, Inc. (a corporation for tax purposes) had a negative $15,000 in E&P. During the year,

the company had $5,000 in profits. On July 1, the company distributed property with an adjusted basis of
$50,000 and a fair market value of $40,000 to Jenny (an individual), the sole shareholder of the corporation. It was
the only distribution that the company made during the year. Jenny's stock in the company had a fair market
value of $50,000 and an adjusted basis of $20,000.

Please address the following:

  1. What is the amount of the distribution to Jenny?
  2. What are the federal tax consequences to Jenny of the distribution?
  3. What are the federal tax consequences to Jenny, Inc. of the distribution?
  4. What alternative transaction would have given Jenny and Jenny Inc.a better result here?

Answers

QuickHelper
(10)
Status NEW Posted 12 Aug 2017 05:08 PM My Price 8.00

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