Reference no: EM13214843
When Pheasant Corporation was formed under § 351, Kristen transferred property (basis of $26,000 and fair market value of $22,500) for § 1244 stock. Kristen's basis in the Pheasant stock is $26,000. Three years later, Pheasant Corporation goes bankrupt and its stock becomes worthless. Kristen, who is single, owned the stock as an investment. Kristen's loss is:
Select one:
a. None of the choices.
b. $26,000 ordinary.
c. $26,000 capital.
d. $3,500 ordinary and $22,500 capital.
e. $22,500 ordinary and $3,500 capital.
Ivory Corporation, a calendar year, accrual method C corporation, has two cash method, calendar year shareholders who are unrelated to each other. Craig owns 55% of the stock, and Oscar owns the remaining 45%. During 2011, Ivory paid a salary of $200,000 to each shareholder. On December 31, 2011, Ivory accrued a bonus of $50,000 to each shareholder. Assuming that the bonuses are paid to the shareholders on February 1, 2012, compute Ivory Corporation's 2011 deduction for the above amounts.
A. 0
B. 500,000
C. 250,000
D. 450,000
E. 400,000
How must the IRS collect the liability for Federal taxes from among a consolidated group?
Select one:
a. According to the members' relative net asset holdings.
b. No particular order of collection is prescribed by IRS rules.
c. Against the member of the group that generated the tax.
d. Against the parent of the group.
e. According to the members' current internal tax-sharing agreement.
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