Stockholder Loan to Corporation by kqk86674

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									Tab: Ch9-Corp.                           File: fbf6df5e-b25c-45e3-bdce-78acd8f9c4df.xls                     Page 1 of 3
   No Ans
    1  B
    2  A                                                                    Partnership Return
                                                                        Tax Form Pg 1
                                                                           Ordinary     Separate
                 Net income from operations                   $170,000      $170,000
                 Municipal bond interest income                  10,000                     10,000
                 Dividend income                                  5,000                      5,000
                 Long-term capital gains                         20,000                     20,000
                 Net Income                                                   170,000
                 Fred's ownership                                                 50%
                 Fred's income from partnership                          $     85,000

                                                                                 Jane's        Jane's
    3     C                                               Partnership           Income         Basis
                 Amount invested                              $20,000                           $20,000
                 Total taxable income of                       24,000                 8,000       8,000
                 Non-taxable income of                          6,000                             2,000
                                                                                                $30,000
                 Withdrawn by Jane                                                                9,000
                 Ending basis for Jane                                                        $ 21,000

    4     D                                                    Data             Income            Basis
                 Sam's investment in partnership                $7,000                             $7,000
                 Partnership income                             10,000                5,000         5,000
                 Partnership debt                               12,000                              6,000
                                                                                     $5,000
                 Ending basis                                                                 $    18,000

    5     A

    6     B      Corporation had the following items of income and expenses:
                 What is the Corporation’s dividends-received deduction, if any?
                 Income from operations                                   $500,000
                 Expenses of operations                                     400,000
                 Net Operating Income                                       100,000
                 Dividend income from a 10% owned corporation                90,000
                 Total                                                    $190,000
                 Dividend Received Deduction percentage                        70%
                 Dividend Received Deduction                        $       63,000

    7     D      Corporate chartiable contributions deduction limited to 10% of TI.
                 Chris Corporation - Charitable Contribution
                 Gross receipts (Operating Revenues)                                              $95,000
                 Operating Expenses, not including Cash Contributions                              65,000
                 Net income before deducting charitable contributions                              30,000
                 Cash contributions to qualified charities                                        $20,000
                 Deductible contribution                                                           $3,000

    8     C                                                                     1040
                 S Corporations                               Facts           Income
                 Net ordinary business income             $    300,000      $    100,000
                 Municipal bond interest                        20,000               -
                 Withdrawals                                   120,000
                                                                            $      100,000
Tab: Ch9-Corp.                             File: fbf6df5e-b25c-45e3-bdce-78acd8f9c4df.xls                     Page 2 of 3


    9     C      Sunnie
                 Owner's loss deduction is limited to basis in stock.
                 Cannot count share of corporate debt to other parties in computing basis of stock.

   10     C

   11     B      Haas Corporation                            Information            Basis
                 Taxable Income                                    $60,000
                 Ordinary Income                                   $50,000            $50,000
                 Investment income                                 $10,000             10,000
                 Municipal bond interest                            $8,000              8,000
                 Change in Basis for all owners                                        68,000
                 Change in Basis for a 50% owner                                      $34,000

   12     B      Rich Corporation
                 Investment or Beginning Basis                                                    $200,000
                 Add:
                   Ordinary Income                                                    $40,000
                   Separate Income or gains
                   Tax-free income                                                     $6,000
                   Contributions of Capital
                 Total Additions                                                                   $46,000
                 Less:
                   Ordinary Loss
                   Separate Expense or Losses              Cap. Loss                   ($3,000)
                   Non-deductible Expenses
                   Tax-Free Withdrawals
                 Total Reductions                                                                  ($3,000)
                 Ending Stock Basis                                                               $243,000
                 Loss limit also includes a stockholder's loan to an S Corporation.

                                                                                                  Return
   13     A      Basis in partnership                                                $50,000
                 Cash Distributed                                                     20,000           $0
                 Remaining basis after cash distribution                              30,000
                 Land Distributed
                  Adjusted basis                                   40,000
                  Fair market value                                35,000                              $0
                 Total income of Jody
                                                                                                       $0
Tab: Ch9-Corp.                                   File: fbf6df5e-b25c-45e3-bdce-78acd8f9c4df.xls                                  Page 3 of 3
   14     B            Current distribution to Rebecca.
                       Proportionate Nonliquidating Distributions
                 1     Partner's beginning outside basis in the partnership                             $   10,000
                 2     Less: Cash received.                                                                 (8,000)
                 3     Gain recognized (excess of line 2 over line 1)                                          -
                 4     Remaining outside basis [(Line 1) minus (Line 2)]. Min. $0                            2,000
                 5     Partnership's inside basis of other property distributed                              7,000
                 6     Basis to partner of other property received (lesser of amt on Line 4 or 5)            2,000
                 7     Partner's remaining basis in the partnership interest [(Line 4) less (Line 6)]          -


   15     C            Liquidating distribution to Rebecca.
                 1     Partner's beginning outside basis in the partnership                             $   10,000
                 2     Less: Cash received.                                                                 (8,000)
                 3     Gain (loss) recognized (excess of line 2 over line 1)                                 (2,000)
                 4     Remaining outside basis [(Line 1) minus (Line 2)]. Min. $0                           NA
                 5     Partnership's inside basis of other property distributed                             NA
                 6     Basis to partner of other property received (lesser of amt on Line 4 or 5)           NA
                 7     Partner's remaining basis in the partnership interest [(Line 4) less (Line 6)]       NA

   16     C            Ridge Corporation
                       Cash distributions to individual stockholders                $     1,000,000

                       Accumulated earnings and profits at January 1                        ?
                       Earnings and profits for the year ended December 31                  ?
                       Accumulated earnings and profits at December 31              $       750,000
                       Amount treated as dividend                                   $       750,000
                       Excess is return of capital                                  $       250,000

   17     C

   18     D

   19     A          Beth started a new corporation in Year-1.
                     Beth does not borrow from the Corporation or make loans to the Corporation.
                     Beth invested $25,000 in a new Corporation                  January Year 1                        $25,000
                     Corporation elected S Status                                January Year 1
                     Corporation had net income for year                                 Year-1                        $50,000
                     Corporation distributed dividend to Beth                   December Year-1                        $60,000
                     How much income or gain does Beth recognize as a result of the cash distribution
                       Basis is increased to $75,000. Distribution does not exceed $75,000.

   20     C            Basis
                     Beth invested $25,000 in a new Corporation                             January Year 1             $25,000
                     Corporation had net income for year                                            Year-1              50,000
                       Basis                                                                                            75,000
                     Corporation distributed dividend to Beth                            December Year-1                60,000
                       Basis                                                                                           $15,000

								
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