Year | (a)-Year end accumulated DISC income | (b)-Increase (decrease) in accumulated DISC income | (c)-Shares outstanding | (d)-Increase (decrease) per share (column (b) divided by column (c)) |
1973 | $80 | $80 | 20 | $4.00 |
1974 | 50 | (30) | 20 | (1.50) |
1975 | 80 | 30 | 20 | 1.50 |
1976 | 100 | 20 | 1 25 | .80 |
1977 | 140 | 40 | 30 | 1.33 |
(1) Total increase in accumulated DISC income for each share disposed of (sum of amounts in column (d)) | 6.13 | |||
Multiply by number of shares disposed of | 10 | |||
(2) Total amount of accumulated DISC income attributable to A's shares disposed of | 61.30 | |||
(3) A's gain | 120.00 | |||
(4) Portion of A's gain taxable as a dividend (lower of lines (2) and (3)) | 61.30 | |||
(5) Portion of A's gain taxable as long-term capital gain (line (3) minus line (4)) | 58.70 |
1 Under subparagraph (3)(ii) of this paragraph, the aggregate fractional amounts of the 10 shares issued on July 1, 1976, is 5 shares, i.e., 10 shares, multiplied by (183 days/366 days). Thus, the number of shares deemed outstanding for 1976 is 25 shares, i.e., 20 shares plus 5 shares.
(1) Total increase in accumulated DISC income for each share disposed of | $5.47 |
Multiplied by number of shares disposed of | 10 |
(2) Total amount of accumulated DISC income attributable of to all shares disposed of | 54.70 |
(3) A's gain | 120.00 |
(4) Portion of A's gain taxable as a dividend (lower of lines (2) and (3)) | 54.70 |
(5) Portion of A's gain taxable as long-term capital gain (line (3) minus line (4)) | 65.30 |
26 C.F.R. §1.995-4