Day 19

Question 1

When is a Corp distribution as a taxable dividend?

Answer 1

To the extent of current E&P or Accumulated E&P

MCQ-04051

Question 2

How are Corp distributions in excess of positive CY and Accumulated E&P treated to the shareholder?

Answer 2

Nontaxable return of Capital

MCQ-14933

Question 3

How is property disturbed from a Corp treated?

Answer 3

As if it sold to the shareholder at FMV

MCQ-11775

Question 4

Will a Corp recognize a loss on a non liquidating distribution?

Answer 4

No capital loss are non deductible. Only recognize gain.

MCQ-04130

Question 5

What is the difference between cash and land distributions in regards to a Corp?

Answer 5

Land distribution = Corp recognize a Capital gain (the difference between FMV and adjusted basis)

Cash distribution lowers CY E&P

MCQ-05998

Question 6

When does a shareholder recognize dividend income from a Corp ?

Answer 6

When cash is received and the date the bond/stock is received at FMV

MCQ-08709

Question 7

Define Exchange of stock:

Answer 7

A stock redemption that is due to a complete liquidation of a Corp

MCQ-08974

Question 8

A stock redemption that is proportionate to the shareholder is treated as a ________?

Answer 8

Dividend

MCQ-08974

Question 9

How is a liquidating distribution of a subsidiary Corp that is owned by 80% of the parent Corp?

Answer 9

No gain or loss is recognized by parent or the subsidiary when the parent owns 80% or more of the stock

MCQ-05978

Question 10

In a liquidating distribution of a Corp what is considered a Capital Assets?

Answer 10

• Land
• Marketable Securities

NOTE: Inventory is not included

MCQ-08708

Question 11

Define Type B reorganization as defined by the IRS

Answer 11

1. Stock of the target Corp is acquired solely for the voting stock of either the acquiring Corp or the parent Corp
2. Acquiring Corp must have control of the target Corp immediately after the acquisition

MCQ-02122