Two Hearts Corporation is a calendar year taxpayer. Jane owns all of its stock. Her...
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Accounting
Two Hearts Corporation is a calendar year taxpayer. Jane owns all of its stock. Her basis for the stock is $5,000. On April 1 of the current (non-leap) year
Two Hearts distributes $60,000 to Jane.
Requirement
Determine the tax consequences of the cash distribution in each of the following independent situations:
| a. | Current E&P of $28,000; accumulated E&P of $15,000. | |||||||||||||||||||||||||||||||||||
| b. | Current E&P of $38,000; accumulated E&P of $(24,000). | |||||||||||||||||||||||||||||||||||
| c. | Current E&P of $(73,000); accumulated E&P of $50,000. | |||||||||||||||||||||||||||||||||||
| d. | Current E&P of $(16,000); accumulated E&P of $(15,000).
|
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