Amature no sign in sex cam Nonliquidating distribution of

The amount of\r\ndividend income taxable to the stockholder in 2011 is\r\na. Cable\r\nreported the following items on its current year tax return:\r\n\t Taxable income \t\t\t\t,000\r\n\t Federal income taxes paid \t\t\t 5,000\r\n\t Current year charitable contributions in excess\r\n\tof 10% limitation \t\t\t\t 1,000\r\n\t Net capital loss for current year \t\t 2,000\r\n What is Cable\u2019s accumulated earnings and profits at the end\r\nof the year? If Mark\u2019s adjusted\r\nbasis for his stock at date of redemption is 0,000, what\r\nwill be the tax effect of the redemption to Mark? \r\n\r\n< 50%\r\n\r\n< 80% x 60% = < 48%\r\n\r\n Stock Redemptions\r\n\r\n If the redemption is treated as an exchange\r\n\r\n Gain is always recognized.\r\n\r\n Loss is recognized unless the shareholder is a related person to the corporation (\u00a7267) \u2013 Shareholder owns more than 50% of the stock\u2019s value.\r\n Ownership is determined using the \u00a7267(c) attribution rules.\r\n\u201c Family\u201d attribution now includes the taxpayer\u2019s brothers and sisters, spouse, ancestors, and lineal descendents.\r\n The basis of the property received is fair market value.\r\n\r\n Stock Redemptions\r\n\r\n Stock Redemptions\r\n\r\n Tax Consequences to the Distributing Corporation\r\n\r\n If the redemption is a dividend, then E& P is reduced by the cash and fair market value of other property distributed.\r\n If the redemption is an exchange, E& P is reduced by the percentage of stock redeemed, not to exceed the fair market value of the property distributed.\r\n E& P is reduced by dividends before reducing E& P for redemptions treated as exchanges.\r\n\r\n\u00a7312(n)(7) example\r\n\r\n\t Spartan Inc. The stock redeemed represents 25% of Spartan stock. The\r\nfollowing information pertains to Kent:\r\n\t Reed\u2019s basis in Kent stock at January 1, 2011 \t\t0,000\r\n\t Accumulated earnings and profits at January\r\n\t\t1, 2011 \t\t\t\t\t\t 125,000\r\n\t Current earnings and profits for 2011 \t\t\t 60,000\r\n What was taxable as dividend income to Reed for 2011? On December 1, 2011, Gelt Corporation declared a\r\ndividend and distributed to its sole shareholder a parcel of\r\nland that was not an inventory asset. $ 6,500\t\t(-,500 AB ,000 mortg.) = -

The amount of\r\ndividend income taxable to the stockholder in 2011 is\r\na. Cable\r\nreported the following items on its current year tax return:\r\n\t Taxable income \t\t\t\t$50,000\r\n\t Federal income taxes paid \t\t\t 5,000\r\n\t Current year charitable contributions in excess\r\n\tof 10% limitation \t\t\t\t 1,000\r\n\t Net capital loss for current year \t\t 2,000\r\n What is Cable\u2019s accumulated earnings and profits at the end\r\nof the year? If Mark\u2019s adjusted\r\nbasis for his stock at date of redemption is $300,000, what\r\nwill be the tax effect of the redemption to Mark? \r\n\r\n< 50%\r\n\r\n< 80% x 60% = < 48%\r\n\r\n Stock Redemptions\r\n\r\n If the redemption is treated as an exchange\r\n\r\n Gain is always recognized.\r\n\r\n Loss is recognized unless the shareholder is a related person to the corporation (\u00a7267) \u2013 Shareholder owns more than 50% of the stock\u2019s value.\r\n Ownership is determined using the \u00a7267(c) attribution rules.\r\n\u201c Family\u201d attribution now includes the taxpayer\u2019s brothers and sisters, spouse, ancestors, and lineal descendents.\r\n The basis of the property received is fair market value.\r\n\r\n Stock Redemptions\r\n\r\n Stock Redemptions\r\n\r\n Tax Consequences to the Distributing Corporation\r\n\r\n If the redemption is a dividend, then E& P is reduced by the cash and fair market value of other property distributed.\r\n If the redemption is an exchange, E& P is reduced by the percentage of stock redeemed, not to exceed the fair market value of the property distributed.\r\n E& P is reduced by dividends before reducing E& P for redemptions treated as exchanges.\r\n\r\n\u00a7312(n)(7) example\r\n\r\n\t Spartan Inc. The stock redeemed represents 25% of Spartan stock. The\r\nfollowing information pertains to Kent:\r\n\t Reed\u2019s basis in Kent stock at January 1, 2011 \t\t$500,000\r\n\t Accumulated earnings and profits at January\r\n\t\t1, 2011 \t\t\t\t\t\t 125,000\r\n\t Current earnings and profits for 2011 \t\t\t 60,000\r\n What was taxable as dividend income to Reed for 2011? On December 1, 2011, Gelt Corporation declared a\r\ndividend and distributed to its sole shareholder a parcel of\r\nland that was not an inventory asset. $ 6,500\t\t(-$6,500 AB $5,000 mortg.) = -$1,500\r\nc. $14,000\t( $7,500 gain - $14,000 FMV $5,000 mortg.) = -$1,500\r\n\r\n Stock Dividends\r\n\r\n A stock dividend increases the number of shares outstanding and thereby reduces the (value) price per share.\r\n Most stock dividends take the form of a stock split, such as a 2-for-1 stock dividend.\r\n Stock dividends are generally nontaxable to shareholders if two conditions are met:\r\n Made with respect to common stock and\r\n Pro rata (proportionate interests maintained)\r\n\r\n Stock Dividend\r\n\r\n In January 2012, Joan Hill bought one share of Orban\r\n Corp. On March 1, 2012, Orban distributed\r\none share of preferred stock for each share of common stock\r\nheld. On March 1, 2012,\r\n Joan\u2019s one share of common stock had a fair market value of\r\n$450, while the preferred stock had a fair market value of\r\n$150.\r\n\r\n14. $(57,000)\r\n\r\n Ordering of E& P Distributions\r\n\r\n Positive Current E& P and Positive Accumulated E& P\r\n\r\n Positive current E& P, negative accumulated E& P\r\n\r\n Negative current E& P, positive accumulated E& P\r\n\r\n Negative current E& P, negative accumulated E& P\r\n\r\n Determining the Dividend\r\n\r\n Taxable dividend\r\n\r\n85. is a calendar-year, accrual-basis C corporation.\r\n In 2011, Kent made a nonliquidating distribution of\r\nproperty with an adjusted basis of $150,000 and a fair market\r\nvalue of $200,000 to Reed, its sole shareholder. Sunny\u2019s basis in the property distributed is $100.\r\n\r\n Under \u00a7311(b)(2), Sunny Corporation reports a gain of $200 on the distribution ($300 Liab - $100 AB).\r\n\r\n The property\u2019s FMV is deemed to be the amount of the liability assumed because it exceeds the property\u2019s fair market value.\r\n\r\n Determining the Dividend\r\n\r\n Effect on E& P\r\n\r\n91.

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The amount of\r\ndividend income taxable to the stockholder in 2011 is\r\na. Cable\r\nreported the following items on its current year tax return:\r\n\t Taxable income \t\t\t\t$50,000\r\n\t Federal income taxes paid \t\t\t 5,000\r\n\t Current year charitable contributions in excess\r\n\tof 10% limitation \t\t\t\t 1,000\r\n\t Net capital loss for current year \t\t 2,000\r\n What is Cable\u2019s accumulated earnings and profits at the end\r\nof the year? If Mark\u2019s adjusted\r\nbasis for his stock at date of redemption is $300,000, what\r\nwill be the tax effect of the redemption to Mark? \r\n\r\n< 50%\r\n\r\n< 80% x 60% = < 48%\r\n\r\n Stock Redemptions\r\n\r\n If the redemption is treated as an exchange\r\n\r\n Gain is always recognized.\r\n\r\n Loss is recognized unless the shareholder is a related person to the corporation (\u00a7267) \u2013 Shareholder owns more than 50% of the stock\u2019s value.\r\n Ownership is determined using the \u00a7267(c) attribution rules.\r\n\u201c Family\u201d attribution now includes the taxpayer\u2019s brothers and sisters, spouse, ancestors, and lineal descendents.\r\n The basis of the property received is fair market value.\r\n\r\n Stock Redemptions\r\n\r\n Stock Redemptions\r\n\r\n Tax Consequences to the Distributing Corporation\r\n\r\n If the redemption is a dividend, then E& P is reduced by the cash and fair market value of other property distributed.\r\n If the redemption is an exchange, E& P is reduced by the percentage of stock redeemed, not to exceed the fair market value of the property distributed.\r\n E& P is reduced by dividends before reducing E& P for redemptions treated as exchanges.\r\n\r\n\u00a7312(n)(7) example\r\n\r\n\t Spartan Inc. The stock redeemed represents 25% of Spartan stock.

The\r\nfollowing information pertains to Kent:\r\n\t Reed\u2019s basis in Kent stock at January 1, 2011 \t\t$500,000\r\n\t Accumulated earnings and profits at January\r\n\t\t1, 2011 \t\t\t\t\t\t 125,000\r\n\t Current earnings and profits for 2011 \t\t\t 60,000\r\n What was taxable as dividend income to Reed for 2011? On December 1, 2011, Gelt Corporation declared a\r\ndividend and distributed to its sole shareholder a parcel of\r\nland that was not an inventory asset. $ 6,500\t\t(-$6,500 AB $5,000 mortg.) = -$1,500\r\nc. $14,000\t( $7,500 gain - $14,000 FMV $5,000 mortg.) = -$1,500\r\n\r\n Stock Dividends\r\n\r\n A stock dividend increases the number of shares outstanding and thereby reduces the (value) price per share.\r\n Most stock dividends take the form of a stock split, such as a 2-for-1 stock dividend.\r\n Stock dividends are generally nontaxable to shareholders if two conditions are met:\r\n Made with respect to common stock and\r\n Pro rata (proportionate interests maintained)\r\n\r\n Stock Dividend\r\n\r\n In January 2012, Joan Hill bought one share of Orban\r\n Corp. On March 1, 2012, Orban distributed\r\none share of preferred stock for each share of common stock\r\nheld. On March 1, 2012,\r\n Joan\u2019s one share of common stock had a fair market value of\r\n$450, while the preferred stock had a fair market value of\r\n$150.\r\n\r\n14.

,500\r\nc. ,000\t( ,500 gain - ,000 FMV ,000 mortg.) = -

The amount of\r\ndividend income taxable to the stockholder in 2011 is\r\na. Cable\r\nreported the following items on its current year tax return:\r\n\t Taxable income \t\t\t\t$50,000\r\n\t Federal income taxes paid \t\t\t 5,000\r\n\t Current year charitable contributions in excess\r\n\tof 10% limitation \t\t\t\t 1,000\r\n\t Net capital loss for current year \t\t 2,000\r\n What is Cable\u2019s accumulated earnings and profits at the end\r\nof the year? If Mark\u2019s adjusted\r\nbasis for his stock at date of redemption is $300,000, what\r\nwill be the tax effect of the redemption to Mark? \r\n\r\n< 50%\r\n\r\n< 80% x 60% = < 48%\r\n\r\n Stock Redemptions\r\n\r\n If the redemption is treated as an exchange\r\n\r\n Gain is always recognized.\r\n\r\n Loss is recognized unless the shareholder is a related person to the corporation (\u00a7267) \u2013 Shareholder owns more than 50% of the stock\u2019s value.\r\n Ownership is determined using the \u00a7267(c) attribution rules.\r\n\u201c Family\u201d attribution now includes the taxpayer\u2019s brothers and sisters, spouse, ancestors, and lineal descendents.\r\n The basis of the property received is fair market value.\r\n\r\n Stock Redemptions\r\n\r\n Stock Redemptions\r\n\r\n Tax Consequences to the Distributing Corporation\r\n\r\n If the redemption is a dividend, then E& P is reduced by the cash and fair market value of other property distributed.\r\n If the redemption is an exchange, E& P is reduced by the percentage of stock redeemed, not to exceed the fair market value of the property distributed.\r\n E& P is reduced by dividends before reducing E& P for redemptions treated as exchanges.\r\n\r\n\u00a7312(n)(7) example\r\n\r\n\t Spartan Inc. The stock redeemed represents 25% of Spartan stock. The\r\nfollowing information pertains to Kent:\r\n\t Reed\u2019s basis in Kent stock at January 1, 2011 \t\t$500,000\r\n\t Accumulated earnings and profits at January\r\n\t\t1, 2011 \t\t\t\t\t\t 125,000\r\n\t Current earnings and profits for 2011 \t\t\t 60,000\r\n What was taxable as dividend income to Reed for 2011? On December 1, 2011, Gelt Corporation declared a\r\ndividend and distributed to its sole shareholder a parcel of\r\nland that was not an inventory asset. $ 6,500\t\t(-$6,500 AB $5,000 mortg.) = -$1,500\r\nc. $14,000\t( $7,500 gain - $14,000 FMV $5,000 mortg.) = -$1,500\r\n\r\n Stock Dividends\r\n\r\n A stock dividend increases the number of shares outstanding and thereby reduces the (value) price per share.\r\n Most stock dividends take the form of a stock split, such as a 2-for-1 stock dividend.\r\n Stock dividends are generally nontaxable to shareholders if two conditions are met:\r\n Made with respect to common stock and\r\n Pro rata (proportionate interests maintained)\r\n\r\n Stock Dividend\r\n\r\n In January 2012, Joan Hill bought one share of Orban\r\n Corp. On March 1, 2012, Orban distributed\r\none share of preferred stock for each share of common stock\r\nheld. On March 1, 2012,\r\n Joan\u2019s one share of common stock had a fair market value of\r\n$450, while the preferred stock had a fair market value of\r\n$150.\r\n\r\n14. $(57,000)\r\n\r\n Ordering of E& P Distributions\r\n\r\n Positive Current E& P and Positive Accumulated E& P\r\n\r\n Positive current E& P, negative accumulated E& P\r\n\r\n Negative current E& P, positive accumulated E& P\r\n\r\n Negative current E& P, negative accumulated E& P\r\n\r\n Determining the Dividend\r\n\r\n Taxable dividend\r\n\r\n85. is a calendar-year, accrual-basis C corporation.\r\n In 2011, Kent made a nonliquidating distribution of\r\nproperty with an adjusted basis of $150,000 and a fair market\r\nvalue of $200,000 to Reed, its sole shareholder. Sunny\u2019s basis in the property distributed is $100.\r\n\r\n Under \u00a7311(b)(2), Sunny Corporation reports a gain of $200 on the distribution ($300 Liab - $100 AB).\r\n\r\n The property\u2019s FMV is deemed to be the amount of the liability assumed because it exceeds the property\u2019s fair market value.\r\n\r\n Determining the Dividend\r\n\r\n Effect on E& P\r\n\r\n91.

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The amount of\r\ndividend income taxable to the stockholder in 2011 is\r\na. Cable\r\nreported the following items on its current year tax return:\r\n\t Taxable income \t\t\t\t$50,000\r\n\t Federal income taxes paid \t\t\t 5,000\r\n\t Current year charitable contributions in excess\r\n\tof 10% limitation \t\t\t\t 1,000\r\n\t Net capital loss for current year \t\t 2,000\r\n What is Cable\u2019s accumulated earnings and profits at the end\r\nof the year? If Mark\u2019s adjusted\r\nbasis for his stock at date of redemption is $300,000, what\r\nwill be the tax effect of the redemption to Mark? \r\n\r\n< 50%\r\n\r\n< 80% x 60% = < 48%\r\n\r\n Stock Redemptions\r\n\r\n If the redemption is treated as an exchange\r\n\r\n Gain is always recognized.\r\n\r\n Loss is recognized unless the shareholder is a related person to the corporation (\u00a7267) \u2013 Shareholder owns more than 50% of the stock\u2019s value.\r\n Ownership is determined using the \u00a7267(c) attribution rules.\r\n\u201c Family\u201d attribution now includes the taxpayer\u2019s brothers and sisters, spouse, ancestors, and lineal descendents.\r\n The basis of the property received is fair market value.\r\n\r\n Stock Redemptions\r\n\r\n Stock Redemptions\r\n\r\n Tax Consequences to the Distributing Corporation\r\n\r\n If the redemption is a dividend, then E& P is reduced by the cash and fair market value of other property distributed.\r\n If the redemption is an exchange, E& P is reduced by the percentage of stock redeemed, not to exceed the fair market value of the property distributed.\r\n E& P is reduced by dividends before reducing E& P for redemptions treated as exchanges.\r\n\r\n\u00a7312(n)(7) example\r\n\r\n\t Spartan Inc. The stock redeemed represents 25% of Spartan stock.

The\r\nfollowing information pertains to Kent:\r\n\t Reed\u2019s basis in Kent stock at January 1, 2011 \t\t$500,000\r\n\t Accumulated earnings and profits at January\r\n\t\t1, 2011 \t\t\t\t\t\t 125,000\r\n\t Current earnings and profits for 2011 \t\t\t 60,000\r\n What was taxable as dividend income to Reed for 2011? On December 1, 2011, Gelt Corporation declared a\r\ndividend and distributed to its sole shareholder a parcel of\r\nland that was not an inventory asset. $ 6,500\t\t(-$6,500 AB $5,000 mortg.) = -$1,500\r\nc. $14,000\t( $7,500 gain - $14,000 FMV $5,000 mortg.) = -$1,500\r\n\r\n Stock Dividends\r\n\r\n A stock dividend increases the number of shares outstanding and thereby reduces the (value) price per share.\r\n Most stock dividends take the form of a stock split, such as a 2-for-1 stock dividend.\r\n Stock dividends are generally nontaxable to shareholders if two conditions are met:\r\n Made with respect to common stock and\r\n Pro rata (proportionate interests maintained)\r\n\r\n Stock Dividend\r\n\r\n In January 2012, Joan Hill bought one share of Orban\r\n Corp. On March 1, 2012, Orban distributed\r\none share of preferred stock for each share of common stock\r\nheld. On March 1, 2012,\r\n Joan\u2019s one share of common stock had a fair market value of\r\n$450, while the preferred stock had a fair market value of\r\n$150.\r\n\r\n14.

,500\r\n\r\n Stock Dividends\r\n\r\n A stock dividend increases the number of shares outstanding and thereby reduces the (value) price per share.\r\n Most stock dividends take the form of a stock split, such as a 2-for-1 stock dividend.\r\n Stock dividends are generally nontaxable to shareholders if two conditions are met:\r\n Made with respect to common stock and\r\n Pro rata (proportionate interests maintained)\r\n\r\n Stock Dividend\r\n\r\n In January 2012, Joan Hill bought one share of Orban\r\n Corp. On March 1, 2012, Orban distributed\r\none share of preferred stock for each share of common stock\r\nheld. On March 1, 2012,\r\n Joan\u2019s one share of common stock had a fair market value of\r\n0, while the preferred stock had a fair market value of\r\n0.\r\n\r\n14. $(57,000)\r\n\r\n Ordering of E& P Distributions\r\n\r\n Positive Current E& P and Positive Accumulated E& P\r\n\r\n Positive current E& P, negative accumulated E& P\r\n\r\n Negative current E& P, positive accumulated E& P\r\n\r\n Negative current E& P, negative accumulated E& P\r\n\r\n Determining the Dividend\r\n\r\n Taxable dividend\r\n\r\n85. is a calendar-year, accrual-basis C corporation.\r\n In 2011, Kent made a nonliquidating distribution of\r\nproperty with an adjusted basis of 0,000 and a fair market\r\nvalue of 0,000 to Reed, its sole shareholder. Sunny\u2019s basis in the property distributed is 0.\r\n\r\n Under \u00a7311(b)(2), Sunny Corporation reports a gain of 0 on the distribution (0 Liab - 0 AB).\r\n\r\n The property\u2019s FMV is deemed to be the amount of the liability assumed because it exceeds the property\u2019s fair market value.\r\n\r\n Determining the Dividend\r\n\r\n Effect on E& P\r\n\r\n91.

On June 30, 2011, Ral Corporation had earnings and profits of 0,000. At the beginning of the year, Westwind, a C corporation, had a deficit of ,000 in accumulated earnings and profits. Tour Corp., which had earnings and profits of 0,000, made a nonliquidating distribution of property to its shareholders in 2012. Cher assumes a 0 mortgage attached to the property. Under §311(b)(1), Sunny Corporation reports a gain of 0 on the distribution (0 FMV - 0 AB). Three types of redemptions are treated as exchanges by determining the effect of the redemption on the redeemed shareholder: Redemptions that are Substantially Disproportionate are treated as sales. 318 must be used: Family attribution (spouse, children, grandchildren, parents) Attribution from entities to owners or beneficiaries Attribution from owners or beneficiaries to entities Option attribution Stock Redemptions Example A shareholder owns 60 of the corporation’s 100 shares of voting common stock before the redemption.On that date, it sold a plot of land to a noncorporate stockholder for ,000. ,000 Overview of distributions: The portion of a distribution that is a dividend is included in the shareholder’s gross income. For the current year, Westwind reported earnings and profits of ,000. What was the amount of Westwind’s accumulated earnings and profits deficit at year-end? This property, which had an adjusted basis of ,000 and a fair market value of ,000 at date of distribution, did not constitute assets used in the active conduct of Tour’s business. Determining the Dividend Example 2 Cher Holder receives a property distribution from Sunny Corporation with a fair value of 0. Redemptions in Complete Redemption of all of the Stock of the Corporation Owned by the Shareholder Redemptions that are not Essentially Equivalent to a Dividend Stock Redemptions Stock Redemption 92. What percentage ownership test(s) must be met for the shareholder to receive exchange treatment under §302(b)(2)? For 2011, Locke had current earnings\r\nand profits of ,000 and made two ,000 cash distributions\r\nto its shareholders, one in April and one in September\r\nof 2011. This property, which had an adjusted \r\nbasis of ,000 and a fair market value of ,000 at\r\ndate of distribution, did not constitute assets used in the active\r\nconduct of Tour\u2019s business. Sunny\u2019s basis in the property distributed is 0.\r\n\r\n Under \u00a7311(b)(1), Sunny Corporation reports a gain of 0 on the distribution (0 FMV - 0 AB).\r\n\r\n Determining the Dividend \r\n\r\n Example 2\r\n\r\n\t Cher Holder receives a property distribution from Sunny Corporation with a fair value of 0. On January 1, 2011, Locke Corp., an accrual-basis,\r\ncalendar-year C corporation, had ,000 in accumulated\r\nearnings and profits. Tour Corp., which had earnings and profits of\r\n0,000, made a nonliquidating distribution of property to\r\nits shareholders in 2012. Cher assumes a 0 mortgage attached to the property.Smart Dating Academy has one of the best photo studios in the industry; people travel from all over the nation to do their photos in our downtown Chicago location.

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A treats the redemption as an exchange.\r\n CE& P after the dividends is ,000 (,000 - ,000).\r\n AE& P at 7\/01\/11 is 0,000 \u00bd (,000) = 5,000.\r\n Under \u00a7312(n)(7), Spartan reduces AE& P as a result of the redemption in an amount equal to the lesser of:\r\n25% x 5,000 = ,500\r\n,000 (fair value of the distribution)\r\n\r\n Stock Redemptions\r\n\r\n Partial Liquidations\r\n\r\n Corporations can contract in size either by:\r\n Distributing stock of a subsidiary to shareholders (generally treated as a nontaxable spin-off)\r\n Selling a business and distributing the proceeds to shareholders in partial liquidation (qualifies non corporate shareholders for exchange treatment)\r\n Whether a redemption qualifies as a partial liquidation is determined at corporate level by determining whether there has been a genuine corporate contraction; whether other types of redemptions qualify for exchange treatment is determined by the effect of the redemption on the shareholder \r\n\r\n Distributions may require the shareholders to exchange some shares of stock or may be pro rata to all the shareholders without an actual exchange of stock.\r\n Shareholders who are not corporations (non corporate shareholders) receive exchange treatment if the redemption is a partial liquidation\r\n Corporate shareholders determine their tax consequences using the change-in-stock ownership rules that apply to stock redemptions.\r\n\r\n Partial Liquidation\r\n\r\n93. As a tax-free transaction.\r\n\r\n Please select the category that most closely reflects your concern about the presentation, so that we can review it and determine whether it violates our Terms of Use or isn't appropriate for all viewers. On January 1, 2011, Locke Corp., an accrual-basis, calendar-year C corporation, had ,000 in accumulated earnings and profits. The entire distribution is deemed to come from current E&P and is a dividend to the shareholders.

How does a non corporate shareholder treat the\r\ngain on a redemption of stock that qualifies as a partial\r\nliquidation of the distributing corporation? Learning Objectives Explain the basic tax law framework that applies to property distributions from a corporation to a shareholder Compute a corporation’s earnings and profits and calculate the dividend amount received by a shareholder Identify situations in which a corporation may be deemed to have paid a “constructive dividend” to a shareholder Comprehend the basic tax rules that apply to stock dividends Learning Objectives Comprehend the different tax consequences that can arise from stock redemptions Contrast a partial liquidation with other types of stock redemptions and describe the difference in tax consequences to the shareholders Framework for Property Distributions Corporations cannot deduct dividend distributions and this creates the “double taxation” of the corporation’s income. For 2011, Locke had current earnings and profits of ,000 and made two ,000 cash distributions to its shareholders, one in April and one in September of 2011. This is because CE&P is measured as of the close of the taxable year without regard to what it was on the actual date of distribution.

The basis of the property received is fair market value.