Freddy; a calendar year, cash basis taxpayer; had the following transactions in 2019: He purchased 2,000...
Freddy; a calendar year, cash basis taxpayer; had the following transactions in 2019:
He purchased 2,000 shares of General Electric on February 1, 2019. On October 2, 2019, he gave 1,000 shares to his daughter. Just as Freddy expected, GE declared a $2.00 per share dividend on October 15, 2019, which was payable on November 15, 2019 to stockholders of record as of October 10, 2019. Freddy received his dividends on November 15, 2019.
He purchased 1,000 shares of Crowley Marine on July 1, 2019. On July 5, 2019, Crowley declared a $1.00 per share dividend to stockholders of record as of July 30, 2019. Freddy sold the Crowley stock on August 15, 2019 and received his dividends on August 30, 2019. For 2019, Freddy received $300 of dividends on a savings account he maintained at the Huntsville Savings and Loan.
During 2019, he received 100 shares of common stock as a stock dividend from Staples. The value of the stock was $2,500, and Freddy did not have the option to receive cash in lieu of the shares of stock.
Freddy is the sole shareholder of Alexia Construction, a C-corporation, since March 13, 2001. During 2019, the corporation distributed a parcel of land to Freddy. The fair market value of the land was $35,000, and the corporation had an adjusted basis in the land of $20,000. As CEO of Alexia Construction, Freddy was paid a salary of $650,000 during 2018. CEOs of construction companies of similar size and complexity in the geographical area were paid salaries of $350,000 during 2018.
How much dividend income must Freddy recognize for 2019?
Homework Answers
Dividend Income to be recognized in 2019
a) General Electric Shares Dividend - $ 2 *1000 = 2000
b)Crowley Marine Share = $ 1*1000 = 1000
c)Huntsville Saving & Loan = $ 300
d) Received Dividend as Stock $ 2500 from Staples
Total dividend income to be recognized on cash basis of accounting in 2019 = $ 3300
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Freddy; a calendar year, cash basis taxpayer; had the following
transactions in 2019:
He purchased 2,000...
Freddy; a calendar year, cash basis taxpayer; had the following transactions in 2019: He purchased 2,000...
Freddy; a calendar year, cash basis taxpayer; had the following transactions in 2019: He purchased 2,000 shares of General Electric on February 1, 2019. on October 2, 2019, he gave 1,000 shares to his daughter. Just as Freddy expected, GE declared a $2.00 per share dividend on October 15, 2019, which was payable on November 15, 2019 to stockholders of record as of October 10, 2019. Freddy received his dividends on November 15, 2019. He purchased 1,000 shares of Crowley...
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