Latest Questions & Answers

Q: Jayhawk Company reports current E&P of $300,000

Jayhawk Company reports current E&P of $300,000 and accumulated E&P of negative $200,000. Jayhawk distributed $400,000 to its sole shareholder, Christine Rock, on the last day of the year. Christine’s...

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Q: Aggie Corporation made a distribution of $500,000 to Rusty

Aggie Corporation made a distribution of $500,000 to Rusty Cedar in partial liquidation of the company on December 31 of this year. Rusty, an individual, owns 100% of Aggie Corporation. The distributi...

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Q: Bonnie and Clyde are the only two shareholders in Getaway Corporation.

Bonnie and Clyde are the only two shareholders in Getaway Corporation. Bonnie owns 60 shares with a basis of $3,000, and Clyde owns the remaining 40 shares with a basis of $12,000. At year end, Getawa...

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Q: Cadillac Square Corporation determined that $1,000,000 of

Cadillac Square Corporation determined that $1,000,000 of its domestic production activities deduction on its current year tax return was uncertain, but that it was more likely than not to be sustaine...

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Q: Spartan Corporation redeemed 25% of its shares for $2,

Spartan Corporation redeemed 25% of its shares for $2,000 on July 1 of this year, in a transaction that qualified as an exchange under §302(a). Spartan’s accumulated E&P at the beginning of the year w...

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Q: EG Corporation redeemed 200 shares of stock from one of its shareholders

EG Corporation redeemed 200 shares of stock from one of its shareholders in exchange for $200,000. The redemption represented 20% of the corporation’s outstanding stock. The redemption was treated as...

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Q: Shaw Corporation reported pretax book income of $1,000,

Shaw Corporation reported pretax book income of $1,000,000. Included in the computation were favorable temporary differences of $200,000, unfavorable temporary differences of $50,000, and favorable pe...

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Q: Oriole Corporation, a privately-held company, has one class

Oriole Corporation, a privately-held company, has one class of voting common stock, of which 1,000 shares are issued and outstanding. The shares are owned as follows: Larry Byrd……………………...

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Q: Your client, Midwest Products, Inc. (MPI), is

Your client, Midwest Products, Inc. (MPI), is a closely-held, calendar-year, accrual-basis corporation located in Fowlerville, Michigan. MPI has two operating divisions. One division manufactures lawn...

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Q: Cougar Company is owned equally by Cat Stevens and a partnership that

Cougar Company is owned equally by Cat Stevens and a partnership that is owned equally by his father and two unrelated individuals. Cat and the partnership each own 3,000 shares in the company. Cat wa...

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