Assume a corporation winds up its operations and is left with cash on hand of $1,700,000 to distribute to shareholders. The corporation has a capital dividend account of $325,000 and PUC of $300,000.
Assume a corporation winds up its operations and is left with cash on hand of $1,700,000 to distribute to shareholders. The corporation has a capital dividend account of $325,000 and PUC of $300,000.
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 11DQ
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Transcribed Image Text:Assume a corporation winds up its operations
and is left with cash on hand of
$1,700,000 to distribute to shareholders. The
corporation has a capital dividend account of
$325,000 and PUC of $300,000.
The corporation has one shareholder, who
holds 32,000 shares with an adjusted cost
base of $240,000. How will the proceeds be
taxed to the shareholder?
Choose the correct answer.
A.Taxable dividend of
$1,400,000
& capital gain of $60,000
В.
Taxable capital gain of $835,000
C.Taxable dividend of
$1,075,000
& taxable capital gain of $30,000
D.
Taxable capital gain of $240,000
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ISBN:
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Author:
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Publisher:
CENGAGE LEARNING - CONSIGNMENT