[sonia2010]

Is there an easier way to understand and remember Corporate distributions, shareholder’s basis and corporation’s basis??

I have scheduled my REG exam on Feb 11th. I’m working hard on trying to pass at the first attempt…like millions of others out there! When I brush through the topic before I sit to take a practice test, I am able to understand but am finding it hard to remember the same during the test..

Any help will be appreciated!! Thanks in advance.

[freshy70]

An easier way than what? I can't really help you if you don't explain better. Better know it. It's definitely important on the test.

BEC - 5/20/11 83
REG - 11/20/11 83
FAR - 2/26/12 82
AUD - 7/26 86
Ethics 12/27/12 90

[Givemesleep]

Think of basis as a bucket, profit in, distributions out, losses out etc etc, with partnerships, recourse and qualified non-recourse also give rise to basis. I know this is a very general answer, but one could spend hours explaning all the in's and out's.

Reg 11/15/2011 - 80
Aud 02/28/2012 - 81
Bec 05/31/2012 - 78
Far 08/31/2012 - 83 Do you believe in Miracles, YES !!!

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Givemesleep

[sonia2010]

@freshy70 – Here are the points on which I have spent hours trying to understand. I'm using Wiley 2011 books and it's not very well-structured. Hence, the difficulty in understanding the concepts.

Shareholder

1. How to determine the shareholder's basis for stock when property is transferred in exchange for stock?

2. What amount is taxable to a shareholder when he receives distributions (cash/property/dividend) from a corporation?

Corporation

1. How to determine the corporation's basis for property received in exchange for stock?

2. How does the corporation treat liquidating distributions and non-liquidating distributions? And what is taxable for Corporation?

And how important is Sec 1244 Small Business Stock?

Any help is greatly appreciated. Good luck on the remaining 2 papers!!

REG – 2/11/2012

BEC – TBD

FAR – TBD

AUD – TBD

[Anonymous]

I recall a sim, I think on the 2011 Wiley CD or it may have been in the Wiley book, that had a chart of several columns of scenarios of corporate distributions — distinguishing dividends, return of capital, etc, plus basis calculations. It was a beast to work through but very useful exam prep.

I found this googling; it's surely over-comprehensive, but some of the charts could be handy:

https://www.google.com/#hl=en&q=corporate+distributions+examples&oq=corporate+distributions+examples&aq=f&aqi=&aql=&gs_sm=s&gs_upl=18750l19672l0l21172l8l8l0l6l6l0l203l359l0.1.1l2l0&bav=on.2,or.r_gc.r_pw.,cf.osb&fp=72f970ea4df0837a&biw=1680&bih=798

I bet Jeff has some good Ninja notes.

[sonia2010]

@dianepage – Thanks for sharing the link! It is a flood of information but it helps since its depicted in charts. The best part is it breaks down the treatment among different entities. I guess this will be relatively easier to read when compared to the monotonous text book! Again a thanks a lot for sharing it!

[Author]

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