Pogo, Inc., which has a 21 percent marginal tax rate, owns 50 percent of the stock of a CFC. At the beginning of the year, Pogo's basis in the CFC stock was $2 million. The CFC's current year earnings were $750,000 of which $600,000 was subpart F income and zero was global intangible low-taxed income. The CFC paid no foreign income tax and distributed no dividends. a. Explain Pogo's U.S. tax consequences with respect to its investment in the CFC. b. Compute Pogo's basis in its CFC stock at the end of the year.
What will be an ideal response?
a. Pogo will recognize $300,000 ($600,000 × 50%) of U.S. taxable income as a result of its investment in the CFC.
b. Its tax basis in the stock is increased by $300,000, to $2.3 million.
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On June 1, Dave Byers bought 10 Continental Technology bonds with a coupon rate of 9% interest paid on May 1 and November 1. The purchase price was 92.750 and the commission was $5 per bond. Dave sold the bonds on October 1 for 94.50. What was his total gain on this investment?
What will be an ideal response?
Marci told Melanie that she thought Todd was acting strangely the past few days. Melanie said not to worry. She knew everything about Todd and everything was fine. Marci is illustrating which of the following?
A. allness B. scripts C. horn effect D. gender prescriptions
Which of the following personal communications channels consist of family members, neighbors, friends, and associates talking to target buyers?
A) expert channels B) advocate channels C) social channels D) formal channels E) sponsored channels
Assume that Trader Pete's, an organic food retailer in the United States, recently purchased a new refrigeration system for its Washington, DC, store. Trader Pete's paid $1.3 million for the refrigeration unit and paid an additional $120,000 to modify the unit to meet its specific needs. Trader Pete's paid $55,000 for the transportation and installation of the unit, plus $48,000 for an annual
insurance premium for the first year, which begins next month. Finally, assume that Trader Pete's hired a refrigeration technician, who is charged with the maintenance of the unit; that technician's annual salary is $80,000 . How much should Trader Pete's record as the acquisition cost of the refrigeration unit? a. $1,300,000 b. $1,420,000 c. $1,475,000 d. $1,523,000 e. $1,603,000