Aowns half the common stock of x with an adjusted basis of $40, and y owns the other half of the x common stock with an adjusted basis of $100. x’s current e& p from current-year income and expenses/losses is $94, and x has no accumulated e& p. x uses the accrual method, all taxpayers are on the calendar year, and § 1059 does not apply. assume that the corporate tax rate is 34 percent. x leases some rental property that it owns to t, and t agrees to pay the annual rent of $60 directly to x’s shareholders, a and y. what are the results to a, y, and x?

Make or buy eastside company incurs a total cost of $120,000 in producing 10,000 units of a component needed in the assembly of its major product. the component can be purchased from an outside supplier for $11 per unit. a related cost study indicates that the total cost of the component includes fixed costs equal to 50% of the variable costs involved. a. should eastside buy the component if it cannot otherwise use the released capacity? present your answer in the form of differential analysis. use negative sign represent a net disadvantage answer; otherwise do not use negative signs with your answers. cost from outside supplier $answer variable costs avoided by purchasing answer net advantage (disadvantage) to purchase alternative $answer b. what would be your answer to requirement (a) if the released capacity could be used in a project that would generate $50,000 of contribution margin? use negative sign represent a net disadvantage answer; otherwise do not use negative signs with your answers.