Marmot Corporation pays a dividend of $100,000 in the current year. Otter Corporation, a calendar year C corporation, owns 15% of Marmot's stock. Gerald, an individual taxpayer in the 24% marginal bracket, also owns 15% of Marmot's stock. Compare and contrast the treatment of the dividend by Otter Corporation and Gerald. Use the attached dividend deduction. a. Otter Corporation will be allowed a dividends received deduction equal to 50% of the dividends it received. It will pay tax of fill in the blank % on the remaining portion of the dividends.

Marmot Corporation pays a dividend of $100,000 in the current year. Otter Corporation, a calendar year C corporation, owns 15% of Marmot's stock. Gerald, an individual taxpayer in the 24% marginal bracket, also owns 15% of Marmot's stock. Compare and contrast the treatment of the dividend by Otter Corporation and Gerald. Use the attached dividend deduction. a. Otter Corporation will be allowed a dividends received deduction equal to 50% of the dividends it received. It will pay tax of fill in the blank % on the remaining portion of the dividends.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter20: Corporations And Partnerships

Section: Chapter Questions

Problem 42P

See similar textbooks

Similar questions

Question Content Area Corporation A owns 40% of all classes of stock in Corporation B throughout 2021. Corporations A and B are Subchapter C corporations, and they are both domestic corporations. The Board of Directors of Corp. B authorized and paid $600,000 in cash dividends to Corporation A. Assume Corporation A qualifies for the Dividends Received Deduction. For tax purposes, how much does Corporation A realize and recognize on its Form 1120 for 2021? $600,000 realized; $210,000 recognized$390,000 realized; $120,000 recognized$120,000 realized; $600,000 recognized$600,000 realized; $600,000 recognizedNone of the other choices are correct.
4. Assume that the entity is a medium-size and the company policy is to account this type of investment at fair market value, how much investment income should be reported by Jessa Company for 2021? Chevy Company owns 50% of another entity’s preference share capital and 40% of its ordinary share capital. The investee’s share capital outstanding at December 31, 2021 include P5,000,000 of 10% cumulative preference share capital and P10,000,000 of ordinary share capital. The investee reported net income of P6,000,000 for 2021. No dividend was declared for both preference and ordinary share in 2021
XX acquires 80% of the share capital of LL on 1 August 2020 and is preparing its group financial statements for the year ended 31 December 2020. How will LL’s results be included in the group statement of profit or loss? A. 100% of LL’s revenue and expenses for the period ended 1 August 2020 to 31 December 2020 B. 80% of LL’s revenue and expenses for the year ended 31 December 2020 C. 100% of LL’s revenue and expenses for the year ended 31 December 2020 D. 80% of LL’s revenue and expenses for the period 1 August 2020 to 31 December 2020
12. A company grants 100 Share appreciation rights (SAR), payable in cash, to an employee on 1/1/Y1. The predetermined amount for the SAR plan is P50 per right, and the market value of the stock is P55 on 12/31/Y1, P53 on 12/31/Y2, and P61 on 12/31/Y3. Compensation expense recorded in year 3 would be?
24. Based on Item 21, what is the amount of contributed capital that ABC Corporation should report in its May 1, 2020 statement of shareholder’s equity? a. 640,000 b. 600,000 c. 260,000 d. 900,000 25. Based on Item 21, what is the amount of legal capital that ABC Corporation should report in its May 1, 2020 statement of shareholder’s equity?
29. the assets and liabilities of R were stated at their fair values when A acquired it's 80% interest and the fair value method was used to initially measure the NCI. A uses the cost method to account for its investment in R. Net income and dividends for 2021 for the affiliated companies were: A Corp. R Corp. Net Income P105,000 P31,500 Dividends paid 63,000 17,500 Dividends Payable, 1/1 20,000 9,250 Dividends Payable 12/31 31,500 8,750 Retained Earnings of A Corp. in the separate FS at the beginning of the year is P420,000. End of the year evaluation indicates P3,000 impairment in goodwill. The consolidated retained earnings at December 31, 2021 is:
551. CHAPTER 6â€”CORPORATIONS: REDEMPTIONS AND LIQUIDATIONS Question 66 Pursuant to a qualifying stock redemption, Redbird Corporation (E & P of $400,000) transfers land held for investment purposes to Bob, a 10% shareholder. On the date of the distribution, Redbird has a basis of $200,000 in the land and its fair market value is $150,000. Bob has a basis of $40,000 in the shares redeemed. With respect to the redemption: a. Bob will recognize a gain of $110,000. b. Bob will have $150,000 of dividend income. c. Bob will have a $200,000 basis in the land. d. Redbird Corporation will recognize a capital loss of $50,000. e. None of the above. 552. CHAPTER 6â€”CORPORATIONS: REDEMPTIONS AND LIQUIDATIONS Question 67 Canary Corporation has 1,000 shares of stock outstanding. It redeems in a qualifying stock redemption 350 shares for $400,000 at a time when it has paid-in capital of $100,000 and E & P of $1 million. What would be the charge to…
10. When shareholders may elect receive cash in lieu of share dividend, the amount to be charged to retained earnings is equal to the * a. Optional cash dividend b. Fair value of the shares c. Par value of the shares d. Book value of the shares
S1: Book value per share is the amount earned for every capital share owned by a shareholder. S2: When a shareholder exchanges convertible preference shares for ordinary shares, the difference between the par value of preference shares converted and the par value of the ordinary shares issued is recorded by the corporation as a gain or loss on conversion. a. False, True b. False, False c. True, True d. True, False
Please answer in good accounting form. Problem 5: (Share-based compensation: Share appreciation rights) TINCTURE Company granted 300 share appreciation rights to each of the 500 employees on January 1, 2020. The rights are due to vest on December 31, 2023 with payment being made on December 31, 2023 and expire on December 31, 2024. Only 75% of the awards vested. Share price January 1, 2020 (pre-determined price) December 31, 2020, 2021, and 2022 150 180 December 31, 2023 210 December 31, 2024 190 The share appreciation rights were exercised on December 31, 2024. Requirements: J. Compute for the accrued salaries payable for the year ended: 22. 2020 23. 2021 24. 2023 25. 2024 (prior to the exercise of the rights)
b) Demonstrate that in principle the shareholders will be equally well off by subscribing to the issue or by selling their rights. Assume the shareholder has 100 shares c) Explain the impact on the value of the right if the issue is undertaken on the specified terms and the share (cum-rights) price falls to € 1.8 shortly after the shareholders are invited to subscribe to the new issue
Question 10 On January 2, 2020, Tuao Company purchased 10% of Abulug Company’s outstanding ordinary shares for P20,000,000. Tuao is the largest single shareholder in Abulug and this gives Tuao the power to participate in the financial and operating policy decisions of the Abulug but is not control or joint control over those policies. Abulug reported profit of P10,000,000 and paid dividend of P4,000,000. What should be the balance in Tuao’s investment in Abulug Company at the end of 2020? Group of answer choices P20,600,000 P21,000,000 P20,000,000 P21,400,000