Business, 18.07.2020 01:01 christicamp4515
Larry, the sole shareholder of Brown Corporation, sold his 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 cash to Larry on July 1 and $150,000 cash to Ed on December 30.
a. How much of the current E & P is allocated to Larry’s distribution?
$
b. How much of the current E & P is allocated to Ed’s distribution?
$
c. How much of the $450,000 distribution is taxed as dividend income to Larry?
$
d. How much of the $150,000 distribution is taxed as dividend income to Ed?
$
e. Larry recognizes a capital gain of $ on the sale of the stock.
Answers: 1
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Larry, the sole shareholder of Brown Corporation, sold his stock to Ed on July 30 for $270,000. Larr...
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