Enterprise Inc. has 1,000 shares of stock outstanding owned as follows: Shareholder Shares Owned Adiusted Basis Kirk Spock McCoy Uhura 100 100 200 600 $10,000 $10,000 $20.000 $60.000 All shareholders paid $100 per share for their stock. Enterprise Inc. has substantial earnings and profits. All shareholders are unrelated. During the year, Enterprise Inc. redeemed 400 shares of Uhura's stock for $400,000. What is the effect of the redemption on Uhura? Same as (a) except Enterprise Inc. redeemed 200 shares of of Uhura's stock for $200,000. What is the effect of the redemption on Uhura? C. Which of the redemption provisions is being used here? d. If the redemption under the provision cited in (c) fails, what is your backup provision?
Enterprise Inc. has 1,000 shares of stock outstanding owned as follows: Shareholder Shares Owned Adiusted Basis Kirk Spock McCoy Uhura 100 100 200 600 $10,000 $10,000 $20.000 $60.000 All shareholders paid $100 per share for their stock. Enterprise Inc. has substantial earnings and profits. All shareholders are unrelated. During the year, Enterprise Inc. redeemed 400 shares of Uhura's stock for $400,000. What is the effect of the redemption on Uhura? Same as (a) except Enterprise Inc. redeemed 200 shares of of Uhura's stock for $200,000. What is the effect of the redemption on Uhura? C. Which of the redemption provisions is being used here? d. If the redemption under the provision cited in (c) fails, what is your backup provision?
Chapter19: Corporations: Distributions Not In Complete Liquidation
Section: Chapter Questions
Problem 51P
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Transcribed Image Text:Enterprise Inc. has 1,000 shares of stock outstanding owned as follows: Shareholder Shares Owned Adiusted Basis Kirk
Spock McCoy Uhura 100 100 200 600 $10,000 $10,000 $20.000 $60.000 All shareholders paid $100 per share for their
stock. Enterprise Inc. has substantial earnings and profits. All shareholders are unrelated. During the year, Enterprise Inc.
redeemed 400 shares of Uhura's stock for $400,000. What is the effect of the redemption on Uhura? Same as (a) except
Enterprise Inc. redeemed 200 shares of
of Uhura's stock for $200,000. What is the effect of the redemption on Uhura?
C.
Which of the redemption provisions is being used here?
d.
If the redemption under the provision cited in (c) fails, what is your backup provision?
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