sonia2010
offlineMember
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.
Givemesleep
offlineMember
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.
sonia2010
offlineMember
@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
dianepage
offlineMember
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:
I bet Jeff has some good Ninja notes.
sonia2010
offlineMember
@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!
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