Exam (elaborations)
C239 - Advanced Tax Concepts (Ch.13) with 100- correct answers.
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C239 - Advanced Tax Concepts (Ch.13) with 100- correct answers.
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C239 - AdvancedTax Concepts
(Ch.13) with
100% correct
answers
Accumulated E & P - answer Net
undistributed tax-basis earnings of a
corporation aggregated from March 1, 1913,
to the end of the prior tax year. Used to
determine the amount of dividend income
associated with a distribution to
shareholders. § 316 and Reg. § 1.316-2.
Constructive dividend - answer A taxable
benefit derived by a shareholder from his or
her corporation that is not actually initiated
by the board of directors as a dividend.
, Examples include unreasonable
compensation, excessive rent payments,
bargain purchases of corporate property, and
shareholder use of corporate property.
Constructive dividends generally are found in
closely held corporations.
Corporate liquidation - answer Occurs when
a corporation distributes its net assets to its
shareholders and ceases to be a going
concern. Generally, a shareholder recognizes
capital gain or loss upon the liquidation of
the entity, regardless of the corporation's
balance in its earnings and profits account.
The liquidating corporation recognizes gain
and loss on assets that it sells during the
liquidation period and on assets that it
distributes to shareholders in kind.
Current E & P - answer Net tax-basis
earnings of a corporation aggregated during
the current tax year. A corporate distribution
is deemed to be first from the entity's
current earnings and profits and then from
accumulated earnings and profits.
Shareholders recognize dividend income to
the extent of the earnings and profits of the
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