Cornflower Corporation distributes equipment (adjusted basis of $70,000, fair market value of $55,000) to its shareholder, Roy.

Question:

Cornflower distributes equipment (adjusted basis of $70,000, fair market value of $55,000) to its shareholder, Roy. Assume that Cornflower has more than $100,000 of current E & P. What are the tax consequences to Cornflower and to Roy?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...