Curt incorporates Vogel Corporation on January 15 of the current year. Curt makes a $70,000 capital contribution

Question:

Curt incorporates Vogel on January 15 of the current year. Curt makes a $70,000 capital contribution including land having a $12,000 FMV, and Vogel makes a timely S election for this year. Vogel reports $60,000 of ordinary income, $40,000 of Sec. 1231 gain, $5,000 of tax-exempt interest income, and $3,000 of charitable contributions this year. On December 1, Vogel distributes $5,000 cash plus the land contributed by Curt because the no longer needs it in the business. The land, which had a $10,000 basis and a $12,000 FMV when contributed to the in January, has an $18,000 FMV when distributed.
a. What income do Vogel and Curt report as a result of the distribution?
b. What is Curt’s basis in the Vogel stock on December 31?
c. What is Vogel’s accumulated adjustments account (AAA) balance on December 31? 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...