Question 1

Battle Corporation redeems 20 percent of its stock for $100,000 in a stock redemption that is treated as an exchange by the shareholders. Battle's E&P at the date of the redemption is $200,000. Battle must reduce its E&P by $100,000 because of the redemption.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is not considered a timing difference due to separate accounting methods for taxable income and E&P?

Accepted Answer

A)   Dividends received deduction
B)   Installment gain recognized in current year related to a sale in a prior year
C)   Gain on sale of depreciable assets with higher E&P basis
D)   Section 179 expenseE) None of the above
F) B) and C)

Exam 7: Corporate Taxation: Non-Liquidating Distributions

Which of the following statements is not considered a timing difference due to separate accounting methods for taxable income and E&P?

Correct Answer
verified

Battle Corporation redeems 20 percent of its stock for $100,000 in a stock redemption that is treated as an exchange by the shareholders. Battle's E&P at the date of the redemption is $200,000. Battle must reduce its E&P by $100,000 because of the redemption.

Correct Answer
verified

Exam 7: Corporate Taxation: Non-Liquidating Distributions

Which of the following statements is not considered a timing difference due to separate accounting methods for taxable income and E&P?

Correct AnswerverifiedShow Answer

Battle Corporation redeems 20 percent of its stock for $100,000 in a stock redemption that is treated as an exchange by the shareholders. Battle's E&P at the date of the redemption is $200,000. Battle must reduce its E&P by $100,000 because of the redemption.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified