1.___ Rust Corporation distributes property to its sole shareholder, Andre. The property has a fair market value of $350,000, an adjusted basis of $205,000, and is
subject to a liability of $220,000. Current E & P is $500,000. With respect to the distribution, which of the following statements is correct? a. Andre has
dividend income of $350,000. b. Andre has dividend income of $205,000. c. Andre has dividend income of $145,000. d. Andre has dividend income of $130,000. 4.___The
gross estate of Raul, decedent who died in 2012, includes 1,500 shares of stock of Orange Corporation (basis to Raul of $600,000, fair market value on date of
death of $4.1 million). The estate will incur $2.2 million of death taxes and funeral and administration expenses, and the adjusted gross estate is $9 million.
Orange (E & P of $5 million) redeems $2.2 million of the estates shares to pay taxes and expenses. What are the tax consequences of the redemption to Rauls
estate? a. There is no recognized gain or loss on the redemption. b. $600,000 taxable gain. c. $1,600,000 taxable gain. d. $2,200,000 taxable gain. 5.___ The stock
in Toucan Corporation is held equally by two brothers. Four years ago, the shareholders transfer property (basis of $200,000, fair market value of $220,000) to
Toucan Corporation as a contribution to capital in a A?ยง351 transaction. In the current year and pursuant to a complete liquidation of Toucan, the property is
distributed proportionately to the brothers. At the time of the distribution, the property had a fair market value of $40,000. What amount of loss will Toucan
Corporation recognize on the distribution of the property? a. $0. b. $20,000. c. $160,000. d. $180,000.
subject to a liability of $220,000. Current E & P is $500,000. With respect to the distribution, which of the following statements is correct? a. Andre has
dividend income of $350,000. b. Andre has dividend income of $205,000. c. Andre has dividend income of $145,000. d. Andre has dividend income of $130,000. 4.___The
gross estate of Raul, decedent who died in 2012, includes 1,500 shares of stock of Orange Corporation (basis to Raul of $600,000, fair market value on date of
death of $4.1 million). The estate will incur $2.2 million of death taxes and funeral and administration expenses, and the adjusted gross estate is $9 million.
Orange (E & P of $5 million) redeems $2.2 million of the estates shares to pay taxes and expenses. What are the tax consequences of the redemption to Rauls
estate? a. There is no recognized gain or loss on the redemption. b. $600,000 taxable gain. c. $1,600,000 taxable gain. d. $2,200,000 taxable gain. 5.___ The stock
in Toucan Corporation is held equally by two brothers. Four years ago, the shareholders transfer property (basis of $200,000, fair market value of $220,000) to
Toucan Corporation as a contribution to capital in a A?ยง351 transaction. In the current year and pursuant to a complete liquidation of Toucan, the property is
distributed proportionately to the brothers. At the time of the distribution, the property had a fair market value of $40,000. What amount of loss will Toucan
Corporation recognize on the distribution of the property? a. $0. b. $20,000. c. $160,000. d. $180,000.
