Larry, the sole shareholder of Brown Corporation, sold his Brown stock to Ed on July 30 for $270,000. Larry’s basis in the stock was $200,000 at the beginning of the year. Brown had accumulated E & P of $120,000 on January 1 and has current E & P of $240,000. During the year, Brown made the following distributions: $450,000 of cash to Larry on July 1 and $150,000 of cash to Ed on December 30. How will Larry and Ed be taxed.

Rare Corporation has accumulated E&P of $2,000,000.  The corporation has 1,000 shares of common stock outstanding and owned by unrelated parties as follows:  Julie, 500 shares and Jim, 500 shares.  Julie and Jim each paid $200 per share for Rare stock 15 years ago.  At the end of the year, Rare distributes securities (fair market value $250,000 and adjusted basis of $140,000) to Julie in redemption of 200 share of her stock.  How much tax will Julie owe as a result of the redemption?  Assume Julie is in the 37% tax bracket.

Flintstone Company is owned equally by Fred Stone and his sister Wilma, each of whom holds 1,000 shares in the company. Wilma wants to reduce her ownership in the company, and it was decided that the company will redeem 250 of her shares for $25,000 per share on December 31 of this year. Wilma's tax basis in each share is $5,000. Flintstone has current E&P of $10,000,000 and accumulated E&P at the beginning of the year is $50,000,000. a. What are the amount and character (capital gain or dividend) recognized by Wilma as a result of the stock redemption, assuming only the "substantially disproportionate with respect to the shareholder" test is applied? Dividend

After several years of profitable operations, Javell, the sole shareholder of JBD Inc., a C corporation, sold 22 percent of her JBD stock to ZNO Inc., a C corporation in a similar industry. During the current year, JBD reports $1,000,000 of after-tax income. JBD distributes all of its after-tax earnings to its two shareholders in proportion to their shareholdings. How much tax will ZNO pay on the dividend it receives from JBD? What is ZNO’s tax rate on the dividend income (after considering the DRD)?

Sweeney originally contributed $302,000 in cash for a one-fourth interest in the Gilbert LLC. During the several years that Sweeney was a member of the LLC, his share of the LLC's income was $181,200 and he withdrew $120,800 cash. The LLC's liabilities are $151,000, of which Sweeney's share is $37,750. The LLC has $75,500 of hot assets, of which Sweeney's share is $18,875. Sweeney sells his LLC interest to Jana for $398,640 cash, with Jana also assuming Sweeney's share of the LLC's liabilities. How much is Sweeney's gain on the sale, and what is its character? Sweeney's total gain on the sale is $ 35,000 X , of which $ 15,000 x recognized as ordinary income, with the remaining $ 20,000 X recognized as a long-term capital gain. How much is Jana's adjusted basis for her LLC interest? 245,000 X

Flintstone Company is owned equally by Fred Stone and his sister Wilma, each of whom holds 1,000 shares in the company. Wilma wants to reduce her ownership in the company, and it was decided that the company will redeem 250 of her shares for $25,000 per share on December 31 of this year. Wilma's tax basis in each share is $5,000. Flintstone has current E&P of $10,000,000 and accumulated E&P at the beginning of the year is $50,000,000. c. Assuming the company did not make any dividend distributions this year, by what amount does Flintstone reduce its E&P as a result of the redemption? Reduction in E&P

After several years of profitable operations, Javell, the sole shareholder of JBD Inc., a C corporation, sold 22 percent of her JBD stock to ZNO Inc., a C corporation in a similar industry. During the current year JBD reports $2,300,000 of after-tax income. JBD distributes all of its after-tax earnings to its two shareholders in proportion to their shareholdings. How much tax will ZNO pay on the dividend it receives from JBD? What is ZNO’s tax rate on the dividend income (after considering the DRD)           ZNO’s tax on dividend     ZNO’s tax rate on dividend income   %

after several years of profitable operations, Javell, the sole shareholder of JBD Incorporated, a C corporation, sold 22 percent of her JBD stock to ZNO Incorporated, a C corporation in a similar industry. During the current year, JBD reports $2,900,000 of after-tax income. JBD distributes all of its after-tax earnings to its two shareholders in proportion to their shareholdings. How much tax will ZNO pay on the dividend it receives from JBD? What is ZENO's tax rate on the dividend income? 1. ZNO's tax on dividend received? 2. ZNO's tax rate on dividend income?

Van and Floyd formed a corporation during the year. In exchange for one-half of the outstanding shares of the corporation's voting stock, which had a total par value of $400, 000, Van contributed property with a fair market value of $200,000 for which he paid $300,000 in a prior year. Floyd contributed property with a fair market value of $200,000 for which he paid $100,000 in a prior year and received the other one-half of the outstanding stock. How much gain or loss will Van and Floyd recognize on the transfer of property? A. Van will recognize $100, 000 loss; Floyd will recognize $100, 000 gain. B. No gain or loss to either Van or Floyd. C. Van will recognize $0 loss; Floyd will recognize $100,000 gain. D. None of the answers are correct.

Kim Company bought 30% of the shares of Phelps, Inc., at the start of 2021. Kim paid $10 million for the shares. Thirty percent of the book value of Phelps’s net assets is $8 million, and the difference of $2 million is due to land that Phelps owns that has appreciated in value. During 2021, Phelps reported net income of $1 million and paid a cash dividend of $0.5 million. At what amount does Kim carry the Phelps investment on its balance sheet as of December 31, 2021?