ACC 565 Course Great Wisdom / tutorialrank.com ACC 565 Course Great Wisdom / tutorialrank.com | Page 8

Question 20
Tia owns 2,000 shares of Bass Corporation common stock with an
$80,000 basis. Bass distributes a nontaxable preferred stock dividend.
When the preferred stock is distributed, it has an FMV of $60,000 and
the FMV of the 2,000 common stock shares is $180,000. The basis of
the preferred stock is
Question 21
American Corporation acquires the noncash assets of Utech
Corporation in exchange for $700,000 of its voting stock plus $50,000
of cash. Utech Corporation assets are worth $750,000. Utech
Corporation does not distribute the stock and cash but instead holds
the stock as an investment. Utech will use the American cash along
with the cash it retained to start a new business. The transaction can
be classified as a
Question 22
Dixie Corporation distributes $31,000 to its sole shareholder, Sally.
At the time of the distribution, Dixie's E&P is $25,000 and Sally's
basis in her Dixie stock is $10,000. Sally's basis in her Dixie stock
after the distribution is
Question 23
Tomika Corporation has current and accumulated earnings and profits
of $0. Tomika distributes $10,000 to its sole shareholder, Alana. What
are Tomika's earnings and profits
Question 24
Which of the following items are tax preference items for purposes of
arriving at alternative minimum taxable income?
Question 25