Pantone Corporation is a calendar year taxpayer. Dave owns one-third (100 shares) of Pantone stock. His basis in the stock is $12,000. Sylvia owns two-thirds (200 shares) of Pantone stock. Her basis in the stock is $24,000. On Ju Pantone distributes $25,000 to Dave and $65,000 to Sylvia. Read the requirements Remaining distribution Return of capital Capital gain (loss) Remaining stock basis 12000 24000 Requirement b. Determine the tax consequences of the cash distributions to Dave and Sylvia if current E&P is $32,000 and accumulated E&P is $31,000. (Complete all input fields. For zero amounts, make sure to enter "0" in the a not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.) Dave Sylvia - X 25000 65000 Requirements Distribution Dividend income Determine the tax consequences of the cash distributions to Dave and Sylvia in each of the following independent situations: a. Current E&P of $64,000; accumulated E&P of S140,000. Remaining distribution Return of capital b. Current E&P of $32,000; accumulated E&P of S31,000. Capital gain (loss) Remaining stock basis
Pantone Corporation is a calendar year taxpayer. Dave owns one-third (100 shares) of Pantone stock. His basis in the stock is $12,000. Sylvia owns two-thirds (200 shares) of Pantone stock. Her basis in the stock is $24,000. On Ju Pantone distributes $25,000 to Dave and $65,000 to Sylvia. Read the requirements Remaining distribution Return of capital Capital gain (loss) Remaining stock basis 12000 24000 Requirement b. Determine the tax consequences of the cash distributions to Dave and Sylvia if current E&P is $32,000 and accumulated E&P is $31,000. (Complete all input fields. For zero amounts, make sure to enter "0" in the a not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.) Dave Sylvia - X 25000 65000 Requirements Distribution Dividend income Determine the tax consequences of the cash distributions to Dave and Sylvia in each of the following independent situations: a. Current E&P of $64,000; accumulated E&P of S140,000. Remaining distribution Return of capital b. Current E&P of $32,000; accumulated E&P of S31,000. Capital gain (loss) Remaining stock basis
Chapter13: Property Transact Ions: Determination Of Gain Or Loss, Basis Considerations, And Nontaxable Exchanges
Section: Chapter Questions
Problem 7BCRQ
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Transcribed Image Text:Pantone Corporation is a calendar year taxpayer. Dave owns one-third (100 shares) of Pantone stock. His basis in the stock is $12,000. Sylvia owns two-thirds (200 shares) of Pantone stock. Her basis in the stock is $24,000. On June 10 of the current year,
Pantone distributes $25,000 to Dave and $65,000 to Sylvia.
Read the requirements.
Remaining distribution
Return of capital
Capital gain (loss)
Remaining stock basis
12000
24000
Requirement b. Determine the tax consequences of the cash distributions to Dave and Sylvia if current E&P is $32,000 and accumulated E&P is $31,000. (Complete all input fields. For zero amounts, make sure to enter "0" in the appropriate input field. Do
not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.)
Dave
Sylvia
25000
Requirements
Distribution
65000
Dividend income
Determine the tax consequences of the cash distributions to Dave and Sylvia in
each of the following independent situations:
Remaining distribution
Return of capital
a. Current E&P of $64,000; accumulated E&P of $140,000.
b. Current E&P of $32,000; accumulated E&P of $31,000.
Capital gain (loss)
Remaining stock basis
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