Nice, Inc, a § 501(c)(3) Organization, Inherited 100% of the Stock

question 64

Essay

Nice, Inc., a § 501(c)(3) organization, inherited 100% of the stock of Aggressive, Inc., a for-profit entity, at the beginning of the year. Although Nice plans on selling the stock of Aggressive, a buyer has not yet been located. Aggressive's taxable income for the year is $900,000. Aggressive distributed a dividend of $525,000 to Nice at the beginning of December. Determine the tax consequences for the taxable income and the dividend payment:

---

Definitions:

Phoneme

The smallest unit of sound in a language that can distinguish meaning, such as the difference between the sounds of "p" and "b" in "pat" and "bat."

Phonology

The study of the organization and system of sounds in languages.

Morpheme

The smallest grammatical unit in a language that carries meaning; can be a word or a part of a word (such as a prefix).

Gestural Linguistics

The study of communication through non-verbal means, such as gestures and body language, particularly in human interactions.