Solved: Flash co distributed 40000 to skip inc a 25 percent, Accounting Basics

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Flash co distributed 40000 to skip inc a 25 percent

Question - Flash Co., distributed $40,000 to Skip Inc., a 25 percent shareholder. Flash Co.'s E&P applicable to Skip Inc.'s distribution is $20,000 and Skip Inc., had a basis in its stock of $14,000.

A) How much dividend income does Skip Inc. have?

B) How much and what kind of taxable income does Skip Inc. have because of the distribution?

C) What is Skip Inc.'s basis in its stock immediately after the distribution?

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Accounting Basics: Flash co distributed 40000 to skip inc a 25 percent

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Accounting Basics: Flash co distributed 40000 to skip inc a 25 percent

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