Parent Corporation owns 85% of the common stock and 100% of the preferred stock of Subsidiary Corporation. Thecommon stock and preferred stock have adjusted bases of $500,000 and $200,000, respectively, to Parent. Subsidiaryadopts a plan of liquidation on July 3 of the current year, when its assets have a $1 million FMV. Liabilities on that dateamount to $850,000. On November 9, Subsidiary pays off its creditors and distributes $150,000 to Parent with respect toits preferred stoclc No cash remains to be paid to Parent with respect to the remaining $50,000 of its liquidationpreference for the preferred stock, or with respect to any of the common stoclc In each of Subsidiary’s tax years, less than10% of its gross income has been passive income. What are the amount and character of Parent’s loss on the preferredstock? The common stock?A partial list of research sources is0 IRC Secs. 165(g)(3) and 332(a)0 Reg. Sec 1.332.2(b)0 Spaulding Bakeries, Inc, 27 T. C. 684 (1957)0 H. K. Porter Co., Inc, 87 T. C 689 (1986)

Eliminating entries (including goodwill impairment) and worksheets for various years on january 1, 2013, porter company purchased an 80% interest in the capital stock of salem company for$850,000. at that time, salem company had capital stock of $550,000 and retained earnings of $80,000.differences between the fair value and the book value of the identifiable assets of salem company were asfollows: fair value in excess of book valueequipment$130,000land65,000inventory40,000the book values of all other assets and liabilities of salem company were equal to their fair values onjanuary 1, 2013. the equipment had a remaining life of five years on january 1, 2013. the inventory was sold in2013.salem company’s net income and dividends declared in 2013 and 2014 were as follows: year 2013 net income of $100,000; dividends declared of $25,000year 2014 net income of $110,000; dividends declared of $35,000required: a.prepare a computation and allocation schedule for the difference between book value of equity acquired andthe value implied by the purchase price.b.present the eliminating/adjusting entries needed on the consolidated worksheet for the year endeddecember 31, 2013. (it is not necessary to prepare the worksheet.)lo6lo1

Robert black, regional manager for ford in texas and oklahoma, faced a dilemma. the ford f-150 pickup truck was the best-selling pickup ever, yet ford's headquarters in detroit had decided to introduce a completely redesigned f-150. how could mr. black sell both trucks at the same time? he still had "old" f-150s in stock. in his advertising, mr. black referred to the new f-150s as follows: "not a better f-150. just the only truck good enough to be the next f-150." this statement represents ford's of the new f-150.

Jacob is a member of wcc (an llc taxed as a partnership). jacob was allocated $155,000 of business income from wcc for the year. jacob’s marginal income tax rate is 37 percent. the business allocation is subject to 2.9 percent of self-employment tax and 0.9 percent additional medicare tax. (round your intermediate calculations to the nearest whole dollar a) what is the amount of tax jacob will owe on the income allocation if the income is not qualified business income? b) what is the amount of tax jacob will owe on the income allocation if the income is qualified business income (qbi) and jacob qualifies for the full qbi duduction?