Purchase Solution

# Taxes: What is the tax impact to a C or S corporation

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9- Beth's business purchased only one asset during the current year. It placed in service machinery (7-year property) on December 1 with a basis of \$50,000. Calculate the maximum depreciation expense (ignoring Section 179 or bonus expensing)

10- Ilene rents her second home. During 2009, Ilene reported a net loss of \$15,000 from the rental. If Ilene is an active participant in the rental and her AGI is \$140,000, how much of the loss can she deduct against ordinary income in 2009?

11- What is the tax impact to a taxable corporation or an S corporation when it makes a property distribution to a shareholder?

12- What item(s) affect the tax basis of a shareholder in a taxable corporation?

13- Roberta transfers property with a tax basis of \$400 and a fair market value of \$500 to a corporation in exchange for stock with a fair market value of \$350 in a transaction that qualifies for deferral under Section 351. The corporation assumed a liability of \$150 on the property transferred. What is the amount realized by Roberta in the exchange?

14- Camille transfers property with a tax basis of \$800 and a fair market value of \$1,200 to a corporation in exchange for stock with a fair market value of \$850 and \$350 in a transaction that qualifies for deferral under Section 351. Camille also incurred selling expenses of \$100. What is the amount realized by Camille in the exchange

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Taxes: What is the tax impact to a taxable corporation or an S corporation when it makes a property distribution to a shareholder? and more....

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9. If 40% or more of the total assets purchased during the year occurred in the last quarter, then the depreciation is limited to 1/4 of the amount that would normally be allowable. 7 year MACRS property would be 14.29% but the fourth quarter amount is only 3.57% x 50000 = \$1785.

Refer to depreciation tables for fourth quarter percentages.

10. Assuming she is a single person and not a married filing separately, and meets all the other rules under passive loss limitation: the AGI limitation for deduction of rental losses is \$150,000 less 50% of the excess for AGI over \$100,000. The calculation then is \$150,000 - 140,000 x 50%) = \$5,000. The allowable amount of passive activity loss would be \$5,000 and the remaining \$10,000 would carryover to a year in which it can be used.

See Part II of the form linked here: http://www.irs.gov/pub/irs-pdf/f8582.pdf
Hopefully it remembered my input.

11. The property distributed from a C Corporation in the ...

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