What amount of income will the shareholder recognize

Reference no: EM131268635

Q1) ABC Corporation reported the following items in 2016:

Gross Profit on Sales	180,000
Operating Expenses	150,000
Dividends	100,000	---> From less than 20% owned corporation
Charitable Contributions	50,000
Net Capital Gains	8,000
Other Information:
Capital Loss Carryforward	10,000	---> From 2015
Net Operating Loss Carryforward	30,000	---> From 2011
Federal Income Tax	3,000

Based on the information provided, compute ABC Corporation's Taxable Income for 2016.

List all items included in calculation (Similar to presentation on Form 1120)

Using the calculated Taxable Income, calculate current E&P for 2016.

Q2) Calculate Current E&P using the following information:

Taxable Income	400,000
Additional Information:
Current Year Long Term Capital Losses	80,000	---> No Capital Gains in current year
Dividend (15% owned Corp)	100,000	---> DRD was not limited by TI
Fines and Penalties	10,000
NOL Carryfoward	25,000	---> Used in caclulating Taxable Income
U.S. Prod. Activities Deduction	15,000	---> Used in caclulating Taxable Income
Assume a 34% Tax Rate

Q3) ABC Corporation had the following E&P Balances and made a distribution of cash and land:

Current E&P:	35,000
Accumulated E&P:	75,000
Distribution of Cash:	10,000
Distribution of Land: FMV	50,000
Adj. Basis	15,000	---> Adj Basis for Tax & E&P
Subject to Mortgage	60,000

What amount of income will the shareholder recognize?

What is the shareholder's basis in the land?

What is the amount of gain or loss reported by ABC Corporation as a result of the distribution?

Reference no: EM131268635

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