At the Beginning of the Current Year,Dan and Andy Each

question 14

Multiple Choice

At the beginning of the current year,Dan and Andy each own 50% of Swallow Corporation.In July,Dan sold his stock to Kim for $140,000.At the beginning of the year,Swallow Corporation had accumulated E & P of $240,000 and its current E & P is $280,000 (prior to any distributions) .Swallow distributed $300,000 on March 10 ($150,000 to Dan and $150,000 to Andy) and distributed another $300,000 on October 1 ($150,000 to Kim and $150,000 to Andy) .Kim has dividend income of:

• A)$70,000.
• B)$110,000.
• C)$140,000.
• D)$150,000.
• E)None of the above.

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Definitions:

Complies

To act according to an order, set of rules, or request.

Applicable Law

The body of law or legal system that is relevant or utilized in a particular jurisdiction, case, or legal matter to determine the outcome.

Fraudulent Transfers

The illegal or unethical transfer of property to avoid debts or obligations to creditors.

Voidable Preferences

Financial transactions that can be invalidated or reversed, often within bankruptcy proceedings, if they unfairly favor one creditor over others.