Problem NO: 40

Thriller Corporation has one class of voting common stock, of which 1,000 shares are issued and outstanding. The shares are owned as follows: \nJoe Jac

Thriller Corporation has one class of voting common stock, of which 1,000 shares are issued and outstanding. The shares are owned as follows: 

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Joe Jackson400

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Mike Jackson (Joe’s son)200

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Jane Jackson (Joe’s daughter)200

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Vinnie Price (unrelated)   200

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  Total1,000

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Thriller Corporation has current E&P of $300,000 for this year and accumulated E&P at January 1 of this year of $500,000. 

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During this year, the corporation made the following distributions to its shareholders: 

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03/31: Paid a distribution of $10 per share to each shareholder ($10,000 in total).

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06/30: Redeemed 200 shares of Joe’s stock for $200,000.  Joe’s basis in the 200 shares redeemed was $100,000.

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09/30: Redeemed 60 shares of Vinnie’s stock for $60,000. His basis in the 60 shares was $36,000.

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12/31: Paid a distribution of $10 per share to each shareholder ($7,400 in total).

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