Jump to content


Photo
- - - - -

Taxation question

shareholder tax stock

  • Please log in to reply
1 reply to this topic

#1 pragan

pragan

    Newbie

  • CPAnet Member
  • Pip
  • 2 posts

Posted 09 August 2013 - 04:05 AM

Hi,

 

It would be great if you can advise me to approach the below question.. A suggestion of how to approach would help as I cannot expect the answer.

 

A corporation has E&P of $200,000. It's accumulated E&P  as of January 2012 was $300,000. It made quarterly cash distributions of $160,000 to its shareholders during 2012. What are the tax consequences to A,B,C and D in this situation - 

A owns 80% of the company's stock and basis is 80,000. B owns 20% of company's stock and basis is $20,000. After receiving the second quarterly distribution, A sells one-half of stock to C for $500,000. Thereafter A sells remaining stock to D for $530,000 after receiving the third quarterly distribution.

 

Please advise.

 

regards



#2 pragan

pragan

    Newbie

  • CPAnet Member
  • Pip
  • 2 posts

Posted 09 August 2013 - 02:21 PM

Any thoughts..?







Also tagged with one or more of these keywords: shareholder, tax, stock