Questions -
Q1) Lynn Corporation had $200,000 operating income and $75,000 operating expenses during the year. In addition, Lynn had a $100,000 short-term capital gain and a $150,000 short-term capital loss. Compute Lynn's taxable income for the year.
$225,000
$125,000
$75,000
None of the above
Q2) Jeffrey Corporation has accumulated E & P of $30,000 on January 1. During the year, the corporation distributes $120,000 to its sole shareholder, Abe (an individual). Jeffrey Corporation's E & P as of January 1 of the following year is _____.
$0
($35,000)
$40,000
$85,000
None of the above
Q3) Howe Corporation has 1,000 shares of common stock outstanding. Andrew owns 400 of the shares, Andrew's father owns 300 shares, Andrew's daughter owns 200 shares, and Green Corporation owns 100 shares. Andrew owns 70% of the stock in Green Corporation. How many shares is Andrew deemed to own in Howe Corporation under the attribution rules of §318?
400
600
700
1,000
None of the above
Q4) Pursuant to a plan of corporate reorganization adopted in the current year, Thomas exchanged 1,000 shares of Cyndy Corporation common stock which he had purchased for $325,000 for 1,200 shares of Play Corporation common stock that have a fair market value of $663,000. As a result of the exchange, Thomas' recognized gain and his basis in the Play stock are
no recognized gain and basis of $325,000.
no recognized gain and basis of $663,000.
recognized gain of $338,000 and basis of $663,000.
None of the above