Thunder accumulated Earnings and Profits for 2018
Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages to Order 5-10 Pages Description/Paper Instructions
Thunder accumulated Earnings and Profits for 2018
Question Description
Thunder Incorporated has issued 2000 shares of one class of common stocks. These shares are outstanding throughout 2018 and are owned as follows:
Isaac Newton–800 shares, Ben Newton (son of Isaac)–400 shares, Mary Newton (daughter of Isaac)–400 shares, Sam Melvin–400 shares, for a total of 2000 shares.
Thunder Incorporated’s reported current Earnings and Profit of $600,000 in 2018, and accumulated Earnings and Profits of $1,000,000 at the beginning of 2018. The corporation made the following distributions to its shareholders:
03/31/2018: It distributed $20/share to each shareholder or $40,000 in total ($20 x 2000).
06/30/2018: It bought back 400 shares of Isaac’s stock for $400,000 with a corresponding basis at the time of $200,000.
09/30/2018: Redeemed 120 shares of Sam’s stock for $120,000 with a basis of $72,000 for all 120 shares.
12/21/2018: It distributed $20/share to each shareholder for a total of ($29,600 in total).
Requirements:
Determine the tax treatment of each distribution above as either a dividend distribution, an exchange, or return of capital. Explain the tax rule that justifies and supports the determination made for each distribution.
Calculate Thunder Inc.’s accumulated Earnings & Profits at December 31, 2018.
Isaac is planning to retire and would like to sell all his shares to the corporation for $200,000 and a 10-year note with a fair market value of $600,000.
Explain what Isaac and the corporation must do and consider to be sure that the sale or redemption of his shares is treated as an exchange.
Could Joe become or stay as a consultant to the company? Justify your position using the most recent tax law provisions.
The attorney’s fees affecting the disposal of Isaac’s shares were $10,000, could these fees be deductible expenses for the corporation for tax purposes? Please support your position using current tax law or other industry and scholarly sources.
RUBRIC
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. 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The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. GET THIS PROJECT NOW BY CLICKING ON THIS LINK TO PLACE THE ORDER
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