Ch 18: Non Liquidating Distributions

What are the 3 types of non liquidating distributions to stockholders (broadly)

Dividends
Stock Price Appreciation
Stock Buybacks

What is the tax term for RE?

Earnings and Profits
Accumulated economic income

What is the other name for stock redemptions?

stock buybacks

E&O laws place a limit on the amount of ___ income that shareholders must recognize as a result of corporate distributions 

dividend 

What are the layers of corporate distributions in order?

E&P (taxed as div income)
Stock Basis (Nontaxable return of capital)
Distribution in Excess (taxed as capital gain)

Corporate distributions are presumed to be paid out of ___ unless the corporation can show otherwise

E&P (worst option bc taxed at org amount)

What is the starting point for Computation of E&P

taxable income

What is added back to taxable income to find E&P? 

Tax exempt income 
LI proceeds 
DRD
NOL carryforward
Net Capital Loss carryforward
Charitable Contribution carryforward 

What are the subtractions from Taxable income to find E&P?

Non deductible part of M/E expenses
Related party losses
Expenses incurred to product tax exempt income
Federal income taxes paid
LI premiums (net of increase in cash surrender value)
Fines and Penalties
Lobbying expenses
CY net cap loss

What are the timing adjustments that must be added or subtracted from TI to find E&P

Installment v immediate gain recognition
MACRS v SL ADS dep 
Gain or loss on sale of depreciable assets due to lower asset basis
Amort of org exp not allowed 
LIFO recapture amount (excess of FIFO over LIFO) 

gain on sale =

amount realized - adjusted basis

GPM=

gain / amt realized

Based on the Installment sales method what are the steps to determining the installment vs immediate recognition

Calculate the GPM
Multiply each payment x GPM
Difference between immediate rec and installment sale = adjustment for E&P

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