Question
6. The stock of Eagle, Inc. is owned as follows: Tom 30% Tom's Uncle 20% Tom's Daughter 10% Tom's Sister 15% Tom's Wife 15% Toms
6. The stock of Eagle, Inc. is owned as follows:
| Tom | 30% |
| Tom's Uncle | 20% |
| Tom's Daughter | 10% |
| Tom's Sister | 15% |
| Tom's Wife | 15% |
| Toms Cousin | 5% |
| Tom's attorney (unrelated) | 5% |
Tom sells land and a building to Eagle for $100,000. His adjusted basis is $125,000.
(a) What percentage of outstanding stock does Tom own actually and constructively?
(b) What is Tom's realized and recognized loss from this transaction?
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Integrated Audit Practice Case
Authors: David S. Kerr, Randal J. Elder, Alvin A. Arens
7th Edition
0912503688, 978-0912503684
