PRINCIPLES OF TAXATION F/BUS...(LL)
PRINCIPLES OF TAXATION F/BUS...(LL)
23rd Edition
ISBN: 9781260433197
Author: Jones
Publisher: MCG
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Chapter 11, Problem 4QPD
To determine

State whether the three family corporations qualified as an affiliated group is eligible to file a consolidated corporate tax return.

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Four individuals form Chicka Corporation under § 351. Two of these individuals, Jane and Walt, made the following contributions: Both Jane and Walt receive stock in Chicka Corporation equal to the value of their investments. Required: a. What is Jane’s recognized income/loss b. What is Walt’s recognized gain/loss
Kelly, Gwen, and Tuoi own 40 percent, 30 percent, and 30 percent respectively of an accounting business. During the current year, the income is $300,000 after deducting salaries of $60,000 for each shareholder-employee. Assume all three owners are single and that each of them has other income that offsets their allowable deductions. What is Kelly, Gwen, and Tuoi’s income tax liability?
Allen, Beth, and Charlie formed Brick Corporation. Allen and Beth each received one-third of Brick stock in exchange for property transferred. Charlie contributed services in exchange for his one-third stock ownership. Are these exchanges taxable under Section 351? Also, explain Section 351 transactions in general and describe several steps they can take to reduce their tax liability.

Chapter 11 Solutions

PRINCIPLES OF TAXATION F/BUS...(LL)

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