Answered: dividends are not taxable unless the…

Business

Accounting

dividends are not taxable unless the shareholder is given the option between receiving cash or shares of stock. True

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 7DQ

See similar textbooks

Related questions

Q: The new shares which are issued in a rights issue are offered to the existing shareholders at…

A: The company need capital for expansion and growth but the capital is not available easily and…

Q: What is the accounting for treasury share transactions? a. On repurchase or re-issuance of…

A: Hi since you have asked a question with multiple questions we are solving the 1st question for you.…

Q: Which of the following is a characteristic of preferred stock? A. Give voting rights to its owner.…

A: Preferred Stock: They are the combination of equity shares and debt components of capital structure.…

Q: Fill in the blanks. _______ are available for distribution to shareholders unless, ______ by…

A: SOLUTION DIVIDEND A PART OF THE COMPANY'S PROFIT THAT IS PAID TO THE PEOPLE WHO OWNS SHARES IN IT (…

Q: The right of common stockholders to pro corporation by having the first opportunity to buy additi…

A: The person that is having stock of the company care called stockholders. The charter of the…

Q: Which one of the following statements apply only to preference shareholders and not to equity…

A: Preference shares and equity shares are two common classes of shares. They have some distinct…

Q: Which among the following statement is true? None of the listed choices Equity shareholders receive…

A: The equity shareholders refer to the total amount invested by the owners in the business. The equity…

Q: If a company chooses to purchase its own shares and then either (1) retires the repurchased shares…

A: Common shares: Common shares is the instrument used by the company for raising funds from the…

Q: Bhefly discuss the difference between rights of holders of ordinary shares and preference shares…

A: The dividends are the earnings of the shareholders for their shareholdings in the company.

Q: Stock in an estate receives a "stepped-up basis". Therefore, a purchase of a decedent-shareholder's…

A: Step up basis is defined as the readjustment of the value of the appreciated asset for the tax…

Q: Assume you are currently a shareholder who owns cumulative preferred stock with preemptive rights.…

A: Answer:- Shareholder meaning:- A shareholder is any individual, corporation, or organization who…

Q: The dividend is not a legal liability until the board of directors has declared it. true or false.…

A: Equity capital are the funds invested by the owners in the company. The equity holders of the owners…

Q: b) The new shares which are issued in a rights issue are offered to the existing shareholders at…

A: Right Shares are those shares which are issued to the existing shareholder of the company instead of…

Q: Corporations recognize no gain orloss when it issues stock shares for property even if the…

A: Section 351 states non recognition or not recording of the gain or loss on the property transfers…

Q: Is it true or false that corporations muse issue common stock, but may or may not decide to issue…

A: Disclaimer: “Since you have asked multiple question, we will solve the first question for you. If…

Q: When a company requests a further payment from shareholders of the unpaid amounts on their shares,…

A: Issue of Shares: Company raise capital by issuing shares to investors in return for capital. This…

Q: How would the declaration and subsequent issuance of a small stock dividend affect share capital and…

A: Small stock dividend means the issue of shares less than 25% of the total outstanding shares in the…

Q: d) Which characteristic of a corporation limits a stockholder's loss to the amount of his or her…

A: Company means a form of business where the share holder invest money in business in form of shares…

Q: Why might a stock dividend or a stock split be of limited value to an investor? What about a stock…

A: Stock Dividend:When the corporation paid a dividend to stockholders in the form of stock instead of…

Q: Indicate whether the following statements are true or false. If the statementis false, explain…

A: Introduction: Capital gain is referred as any profit or gain that coming from the sale of a ‘capital…

Q: 4) XYZ Corporation declares and distributes a cash dividend that is a result of current earnings.…

A: Fair Value Method: When an investing entity makes an investment and the investment has both…

Q: When treasury shares are reissued as dividends, what amount shall be charged to accumulated profits?

A: Treasury Stock also known as treasury shares are the outstanding equity shares of a company…

Q: Preferred stock is least likely to have which of the following characteristics?a. Preference as to…

Q: Which of the following is not a common characteristic of preferred stock? Select one: a. Callability…

A: Preferred stock holder means those stock holder who will be getting dividend before the common…

Q: Preferred stocks are characterized by all the following, except a. the dividends declared for the…

A: Preferred stocks have different features in comparison to common stocks of the company. These have…

Q: The right of a shareholder to share proportionally in any new stock issue is called a/an…

A: Shares are the units of stock of a corporation that are issued in the financial markets. A…

Q: hat are dividends in arrears? How do they affect the allocation of dividends to preference and…

A: Dividends in arrears means that dividends have accrued but have not yet been paid due to inadequate…

Q: If a preferred stock is of the cumulative type, a. dividends cannot be passed if they are earned.…

A: Preferred stock carry fixed rate of dividends that must be paid each year.

Q: Under the cost method, when treasury stock is purchased by the corporation, the par value and the…

A: Treasury stocks are those stocks reacquired by the company from the previously issued stock to the…

Q: Preferred stocks are characterized by all the following, except voting rights are generally not…

A: Preferred stocks are components of share capital. Preferred stocks have preferential rights of…

Q: A major difference between common and preferred stock Seleccione una: a. is that common stockholder…

A: Common stock and preferred stock are different. Common stock is stock that holds the ownership in…

Q: Generally, once declared, a cash dividend on ordinary shares becomes a liability of the corporation.…

A: Cash dividend is the amount of return paid to the shareholders of the entity from the profits.

Q: Which of the following affects the total Shareholders’ Equity? a. Declaration of a scrip…

A: a Declaration of a scrip dividend :- this dividend is paid to shareholders at later date , company…

Q: Undeclared cash dividends in noncumulative preference shares are: * O Recognized as liabilities…

A: 1. Non Cumulative Preference Shares - Non cumulative preference shares are those shares that provide…

Question

Stock dividends are not taxable unless the shareholder is given the option between receiving cash or shares of stock. True or False.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Issued stock is defined as stock that ________. A. is available for sale B. that is held by the corporation C. has been sold to investors D. has no voting rights
Indicate whether the following statements are true or false. If the statementis false, explain why.a. If a firm repurchases its stock in the open market, the shareholders whotender the stock are subject to capital gains taxes.
A corporate shareholder who receives a constructive dividend cannot apply a dividendsreceived deduction to the distribution. • True O False
If a company’s constitution does not contain rules governing the forfeiture of shares, then the company: Select one: A. can register the shares in the name of another shareholder but cannot receive payment from that shareholder. B. may forfeit shares and reissue them at a later date. C. may forfeit shares but not reissue them. D. cannot forfeit shares.
which characteristics of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation ?
Owners of preference shares often do not have: A Voting rights. B The right to sell their shares on the open market. C Preference to dividends. D Ownership rights to assets of the corporation.
Which characteristic of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? 2. What does the term par value of stock mean? please list credible references for information
A corporation may not deduct dividends paid to shareholders but is permitted to deduct reasonable compensation? True or False
Which of the following is NOT a characteristic of an ordinary share? a) The dividends are at the discretion of directors b) They give voting rights at meetings c) They are irredeemable d) Interest is accrued if the dividend is not paid
The liability of stockholders is normally limited to their investments in the corporation true false
Preferred stock is least likely to have which of the following characteristics?a. Preference as to assets on liquidation of the corporationb. The right of the holder to convert the shares to common stockc. Preference as to votingd. Preference as to dividends