Tammi purchases stock in Vivaldi Corporation. Vivaldi Corporation later encounters legal issues and faces significant legal claims. As a shareholder, Tammi's liability is: a. Just like that of partners b. limited to $50,000 Oc. unlimited d. limited to her investment in the stock
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Tammi purchases stock in Vivaldi Corporation. Vivaldi Corporation later encounters legal issues and faces significant legal claims. As a shareholder, Tammi's liability is: a. Just like that of partners b. limited to $50,000 Oc. unlimited d. limited to her investment in the stock
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- Hunter has a $60,000 loss from an investment in a partnership in which he does not participate. His basis in the interest is $45,000. a.How much of the loss is disallowed by the at-risk rules? b. How much of the loss is disallowed by the passive loss rules?Robert and Lori (Robert’s sister) own all of the stock in Swan Corporation (E & P of $1,000,000). Each owns 500 shares and has a basis of $85,000 in the shares. Robert wants to sell his stock for $600,000, the fair market value, but he will continue to be employed as an officer of Swan Corporation after the sale. Lori would like to purchase Robert’s shares, becoming the sole shareholder in Swan, but Lori is short of funds. What are the tax consequences to Robert, Lori, and Swan Corporation under the following circumstances? Swan Corporation distributes cash of $600,000 to Lori, and she uses the cash to purchase Robert’s shares. Swan Corporation redeems all of Robert’s shares for $600,000.W has a zero basis in his stock investment with Y Corporation, a C corporation. During the year, W receives a $50,000 cash distribution. His share of the current-year earnings and profits is a negative $30,000 and his share of the beginning-of-year accumulated earnings and profits is a negative $10,000. How does W treat the $50,000 distribution? Taxable dividend income Capital gain Nontaxable return of capital Part nontaxable return of capital and part capital gain
- Facts: Miya and Maria owed Mark P500,000.00 for advancing their equity in a corporation they joined as incorporators. Miya and Maria bound themselves solidarily liable for the debt. Later, Miya and Mark became sweethearts so Mark condoned the debt of P500,000.00. Question: May Miya demand from Maria P250,000.00 as her share in the debt? Explain.T owns a sole proprietorship, and L is the sole shareholder in a C corporation. In the current year, both businesses make a net profit of $60,000. Neither business distributes any funds to the owners in the year. For the current year, T must report $60,000 of income on his individual return, but L is not required to report any income from the corporation on her individual return. Question 1 options: True FalseLily and Mary owed Jake P500,000.00 for advancing their equity in a corporation they joined as incorporators. Lily and Mary bound themselves solidarily liable for the debt. Later, Lily and Jake became sweethearts so Jake condoned the debt of P500,000.00. May Lily demand from Mary P250,000.00 as her share in the debt? Explain.
- 1 Juan transfers land with a fair market value of $300,000 and a basis of $100,000 to Royalty Corporation in return for 100% of their stock. Shortly before the formation of Royalty corp, Juan enters into an agreement with another party where he agrees to sell 30% of the Royalty Corporation stock. Two weeks after Royalty Corp was formed Juan sells the 30% of Royalty stock to the second party who is unrelated. Juan will: A. Have no gains or losses recognized for the formation of Royalty Corporation B. Have a gain worth $60,000 on the formation of Royalty Corporation C. Have a gain worth $200,000 on the formation of Royalty Corporation D. None of the aboveArnold and Bobby form Happy Corporation. Arnold transfers equipment that Arnold has an adjusted basis of $30,000 but has a fair market value of $60,000. Arnold receives 50% of the stock. Bobby transfers equipment with an adjusted basis of $70,000 and a faiir market value of $60,000 for the remaining 50% of the stock of Happy Corporation. Does Arnold, Bobbly or Happy have to report any gain or loss on this transaction? Why or why not?Joy is a 30 percent partner in the JOM Partnership when she sells her entire interest to Hope for $72,000 cash. At the time of the sale, Joy’s basis in JOM is $44,000 (which includes her $6,000 share of JOM liabilities). JOM does not have any hot assets. What is Joy’s gain or loss on the sale of her interest?