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ms500
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| Posted: 08 Jul 2009 at 23:42 | IP Logged
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Hi Bryris
To correct: This question is from Becker-CPA02092 ARE May95
Gleim Source- unit 17- source CPA 595 TMG-24
Thanks for your input,
here Becker's ans seems to be wrong i.e.D) 200,000 considering the gain of 50000, where as Gleim's ans is C) 185,000 i.e. dist of of income from current/accum earnings
Thanks
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arushi_13
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| Posted: 08 Jul 2009 at 23:47 | IP Logged
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ms500 I rechecked the same Q with Wiley and Wiley does NOT mention the phrase " from operations". Thus, I want to change my answer...
Accumulated earnings and profits at January 1, 2004 125,000
Current earnings and profits for 2004 (from operations) 60,000
The
CEP for 2004 is 60,000 which DOES NOT include the gain from the distribution of
appreciated property(200k-150k). This is because it specifically says " FROM OPERATIONS".Hence, dividend taxable to the
shareholder is the whole 200k (125k+60k+50k).
Note: However, if the Q said that CEP for 2004 without mentioning that it is " FROM OPERATIONS" then the answer would be 185k as then it would be presumed that the 50k would be included in it and the total of AEP and CEP would be 125k+60k= 185k = taxable dividend.
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ms500
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| Posted: 09 Jul 2009 at 06:06 | IP Logged
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Thanks Arushi for reconfirming
Really appreciate that.
Tks
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Topic: Distribution of Dividend
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