[The following information applies to the questions displayed below.] Last year, Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2017 (effective immediately), in preparation for taking it public. At the time of the election, the corporation had an accumulated adjustments account balance of $150,000 and $450,000 of accumulated E&P from prior C corporation years, and Miley had a basis in her S corporation stock of $135,000. During 2018, Miley's corporation reported $0 taxable income or loss. Also, during 2018 the corporation made distributions to Miley of $80,000 and $60,000. How are these distributions taxed to Miley assuming the following? (Leave no answer blank. Enter zero if applicable. Enter N/A if not applicable.) The first distribution was a property (noncash) distribution (fair market value of distributed property equal to basis) and was paid on lune 15, 2018; the second distribution was a cash distribution, and was paid on September 30, 2018. Amount Taxable Taxable as June 15 September 30 Capital gain Dividend N/A Ordinary income Last year, Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2017 (effective immediately), in preparation for taking it public. At the time of the election, the corporation had an accumulated adjustments account balance of $150,000 and $450,000 of accumulated E&P from prior C corporation years, and Miley had a basis in her S corporation stock of $135,000. During 2018, Miley's corporation reported $0 taxable income or loss. Also, during 2018 the corporation made distributions to Miley of $80,000 and $60,000. How are these distributions taxed to Miley assuming the following? (Leave no answer blank. Enter zero if applicable. Enter N/A if not applicable.) b. Both distributions are in cash, and the first was paid on June 15, 2018, and the second on September 30, 2018. Answer is complete but not entirely correct. Amount Taxable as Taxable June 15 S N/A September 30 $ 5,000 Ordinary income

[The following information applies to the questions displayed below.] Last year, Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2017 (effective immediately), in preparation for taking it public. At the time of the election, the corporation had an accumulated adjustments account balance of $150,000 and $450,000 of accumulated E&P from prior C corporation years, and Miley had a basis in her S corporation stock of $135,000. During 2018, Miley's corporation reported $0 taxable income or loss. Also, during 2018 the corporation made distributions to Miley of $80,000 and $60,000. How are these distributions taxed to Miley assuming the following? (Leave no answer blank. Enter zero if applicable. Enter N/A if not applicable.) The first distribution was a property (noncash) distribution (fair market value of distributed property equal to basis) and was paid on lune 15, 2018; the second distribution was a cash distribution, and was paid on September 30, 2018. Amount Taxable Taxable as June 15 September 30 Capital gain Dividend N/A Ordinary income Last year, Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2017 (effective immediately), in preparation for taking it public. At the time of the election, the corporation had an accumulated adjustments account balance of $150,000 and $450,000 of accumulated E&P from prior C corporation years, and Miley had a basis in her S corporation stock of $135,000. During 2018, Miley's corporation reported $0 taxable income or loss. Also, during 2018 the corporation made distributions to Miley of $80,000 and $60,000. How are these distributions taxed to Miley assuming the following? (Leave no answer blank. Enter zero if applicable. Enter N/A if not applicable.) b. Both distributions are in cash, and the first was paid on June 15, 2018, and the second on September 30, 2018. Answer is complete but not entirely correct. Amount Taxable as Taxable June 15 S N/A September 30 $ 5,000 Ordinary income

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 24CE

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