Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. lily is the sole shareholder of crimson corporatio

Lily is the sole shareholder of Crimson Corporation (a C corporation). At a time when...

50.1K

Verified Solution

Question

Accounting

Lily is the sole shareholder of Crimson Corporation (a C corporation). At a time when Crimson has a deficit in accumulated E & P of $90,000 and current E & P of $65,000, it distributes a cash dividend of $85,000. If Lily's basis in her stock is $15,000, what are the tax consequences of the distribution to Lily and Crimson?

a. How is the $85,000 cash dividend taxed to Lily?

Dividend Income

Return of Capital

Capital Gain

b. What are the tax consequences of the distribution to Crimson Corporation?

After the distribution Crimson Corporation's current E & P is $_____ and its accumulated E & P is $______ deficit

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

My code is working fine but after selecting an option and at the end I want...

Programming
Q

Write RTL code to design a sequence generator which will generate the sequence : 0,0,1,0,1,1 and...

Electrical Engineering
Q

Determine whether each of the statements below is true or false, and place it in the...

Physics
Q

1. Read the following case and answer the related questions: Nike is the largest seller of athletic...

General Management
Q

0 Two particles P and Q describes simple harmonic motion of same amplitude a same...

Physics
Q

First, determine the quadrant for ?, then find x, y, and r; and finally, give...

Basic Math
Q

3 State whether the functions below are one to one or not Explain your conclusion...

Calculus
Q

Samberg Inc. had the following transactions. Oct. 1 Sold $24,500 of merchandise on...

Accounting
Q

How can a company improve each ratio? Make sure to discuss how changes in either...

Accounting
Q

Please calculate the Sharpe ratio of monthly returns of Chinese stocks between 1991-1 and 2018-11...

Accounting
Q

Please help me create this Excel contingencies project using the data AM92 attached below: AM92:...

Finance
Q

Imagine that your older sibling offered to start a business with you. They came up...

Finance