St. Clair Company reports positive current E&P of $500,000 in 20X3 and positive accumulated E&P at the beginning of the year of $400,000. St. Clair Company distributed $600,000 to its sole shareholder, Danielle Brush, on December 31, 20X3. Danielle's tax basis in her St. Clair stock is $120,000. How much of the $600,000 distribution is treated as a dividend to Danielle, and what is her basis in St. Clair stock after the distribution?
What will be an ideal response?
$600,000 dividend and a tax basis of $120,000.
All $600,000 is treated as a dividend because the distribution is less than the company's total E&P of $900,000. Danielle's tax basis in her St. Clair stock remains $120,000.
You might also like to view...
A company's retained earnings on December 31, 2018 was $2,190,000 and its shareholders' equity was $8,760,000. During 2019 the company reported the following: Net income $225,000 A sale of treasury stock costing $75,000 for $79,750 A treasury stock purchase costing $125,700 A cash dividend declaration of $73,200 A 10,000 share "small" common stock ($10 par value) dividend was declared and distributed when the market value was $12.75 per share. What is the shareholders' equity balance on December 31, 2019?
A. $8,865,850 B. $8,934,300 C. $8,738,350 D. $8,663,350
______ argued that leaders and managers are distinct; they are different types of people.
A. Jago B. Zaleznik C. Kotter D. Bass
According to the Sinecure Clause, an investor who seeks to establish a business operation in a foreign country should agree, in advance, that he, she, or it will not ask for its home state to intervene in any dispute with the host state
Indicate whether the statement is true or false
Which of the following limitations does NOT apply to the government in civil proceedings to take a person's liberty or property?
a. Procedural Due Process b. The Takings Clause c. Substantive Due Process d. The Equal Protection Clause