(SOLVED) Kummell Corporation reports a 200 000 taxable

income in the cur

Kummell Corporation reports a $200,000 taxable income in the current year. Included in the
taxable income calculation are $20,000 in dividends received from less-than-20%-owned
corporations, and $30,000 in charitable contributions.Identify the tax issue(s) posed by the facts
presented. Determine the possible tax consequences of each issue that you identify.

LMC, Inc., is equally owned by Larry, Maurice, and Charles. The owners are sports agents.
LMC’s income consists solely of fees from the owners’ clients. During the current year, LMC’s
net income from operations is $380,000, and it receives $20,000 in interest income. The
corporation owns an interest in a […]

Powell owns a 20% interest in Cooke Partnership. At the beginning of 2010, Powell’s basis is
$22,000. Cooke reports a $90,000 operating loss in 2010, and Powell withdraws $10,000 from
the partnership. Cooke’s 2011 operating income is $70,000, and Powell withdraws $10,000
from the partnership.Identify the tax issue(s) posed by […]

Irene contributes land to Micro Development Partnership for a 30% interest. The land’s basis is
$20,000, and it has a fair market value of $80,000. Micro reports a net operating loss of
$100,000 for the year. Irene devotes at least 12 hours a week to managing the partnership
operations.Identify the […]

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In the current year, Jose receives a liquidating property distribution from Valenzuela
Corporation. The basis of the property distributed is $25,000. What is the tax effect of the
distribution for Valenzuela and for Jose ifa. The property distributed has a fair market value of
$30,000, and Jose has a basis […]

In the current year, Simon receives a liquidating cash distribution of $32,000 from Torborg
Corporation. What is the tax effect of the distribution for Torborg and for Simon ifa. Simon has a
basis in his stock of $42,000?b. Simon has a basis in his stock of $19,000?c. Assume the same
[…]

In the current year, Penelope receives a nonliquidating distribution of land from Royal
Corporation. The corporation has earnings and profits of $300,000. What is the tax effect of the
distribution for Royal and for Penelope ifa. The land has a fair market value of $30,000 and a
basis of $18,000?b. […]

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