New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

Advanced Taxation 10-12

by: Merritt Notetaker

Advanced Taxation 10-12 ACCT 4350

Merritt Notetaker


Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

These notes cover the material taught on 10-12-16.
Advanced Federal Taxation
Dr. Ellen Best
Class Notes
Adavanced, taxation, distributions, Liquidation
25 ?




Popular in Advanced Federal Taxation

Popular in Accounting

This 9 page Class Notes was uploaded by Merritt Notetaker on Thursday October 13, 2016. The Class Notes belongs to ACCT 4350 at University of North Georgia taught by Dr. Ellen Best in Fall 2016. Since its upload, it has received 16 views. For similar materials see Advanced Federal Taxation in Accounting at University of North Georgia.


Reviews for Advanced Taxation 10-12


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 10/13/16
Adv T ax 10/12/16 Hints on Test Corrections Charitable Contributions Holding Period Check book for examples Part a – total contribution Part b – carryforward period § 1244 Focus on the individual Check slides for example Rita and Finch One bad loan makes all of the debt boot. Multiple Choice What is it asking for? Chapter 19 – Distributions not in Complete Liquidation (Dividend) Distributions and dividends are NOT the same thing. A distribution from corporate earnings and profits (E&P) is treated as a dividend. Taxed as ordinary income or as a preferentially taxed dividend income. A distribution in excess of E&P is a return of capital Nontaxable to the extent of shareholder stock basis. Excess of stock basis is a capital gain. (Least likely thing to happen) There is no definition of E&P in the tax code. They are similar to Retained Earnings but, not the same. Upper limit amount of dividend income recognized by corporations. Corporations economic ability to pay dividends without impairing capital. Calculation of E&P Begins with Taxable Income Add previously excluded income items and deductions to taxable income Municipal bond interest Excluded life insurance proceeds Federal income tax refunds Dividends Received Deduction Domestic Production Activity Deduction Subtract Nondeductible portion of meals and entertainment Related party losses Expenses incurred to produce tax exempt income Federal income taxes paid Key employee life insurance premiums Fine, penalties, and lobbying expense Add back Charitable Contribution carryover NOL Carryovers Capital losses carryovers Gains and losses only effect E&P when they are recognized. Accounting method Adjustments Installment is allowed for tax, not for E&P Alternative depreciation system (ADS) is required § 179 must be deducted over 5 years. 2 Percentage of completion must be used, no completed contract. See notebook paper. Accumulated E&P Total of previous years’ current E&P (since February 28, 1913) reduced by distributions from E&P. Allocating E&P to Distributions If both accumulated and current are positive, distributions come from current first, then accumulated. If distributions exceed current E&P, must allocate current and accumulated to each distribution. Allocate current on a pro rata basis. Allocate accumulated on a chronological basis. If current E&P is positive and accumulated is negative, allocate distributions on pro rata basis and any excess is a return of capital. If current E&P is negative and accumulated is positive, net them together If the balance is negative, the distribution is a return of capital. If balance is positive, the distribution is a dividend to the extent of the balance. Chapter 20 – Distribution in Complete Liquidation Liquidations – corporation winds up affairs, pays debts, and distributes remaining assets to shareholders. Produces sale or exchange treatment to a shareholder Liquidating corporation recognizes gains and losses upon distribution of its assets, with certain exceptions. Gain or Loss is recognized by corporation on distribution in complete liquidation. Loss may be disallowed or limited if: 3 Property distributed to related parties. Property has built in loss. A subsidiary’s liquidating distribution to its parent corporation or to its minority shareholders. Property treated as if sold for Fair Market Value Result liquidating distribution is subject to corporate level tax, and shareholder level. Related Party Losses are disallowed if: Distribution is not pro rata. Property distributed is disqualified property. Disqualified property is property acquired by corporation in a §351 transaction during the five year period ending on date of distribution. Built-In Losses Not dependent on related parties. Losses are disallowed when property distributed was acquired in §351 as a tax avoidance measure. Tax avoidance is presumed if transfer occurs within 2 years of distribution. Anti-Stuffing Rules – Shareholder and Corporation can’t both take a loss on a property. This is mostly taken care of in step down in basis. See notebook paper. Effect on Shareholder They pay tax on a gain or they take a loss. Amount = FMV – basis in stock Basis in asset = FMV on date of distribution Shareholders only get distributions after taxes have been paid. 4 Scanned by CamScanner Scanned by CamScanner Scanned by CamScanner Scanned by CamScanner Scanned by CamScanner


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."

Janice Dongeun University of Washington

"I used the money I made selling my notes & study guides to pay for spring break in Olympia, Washington...which was Sweet!"

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"


"Their 'Elite Notetakers' are making over $1,200/month in sales by creating high quality content that helps their classmates in a time of need."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.