1. ABC, Inc as purchased land on Jan 1, 2010 for $1,500,000.The firm has never used the land in operations and is holding it as an investment.On Jan 1, 2015 the land has a FMV of $4,400,000.The sole shareholder of ABC, Jeff wants to take the land out of the corporation and use it for personal purposes (to build a house on it).

A. If ABC issues Jeff a distribution of the land-what are the tax issues to ABC and to Jeff:

B. If ABC issues the land to Jeff as part of liquidating the corporation- what are the tax issues to ABC and to Jeff:

C. If ABC issues the land to Jeff as part of a redemption of some of Jeff's stock in the corporation- what are the tax issues to ABC and to Jeff:

D. ABC issues the land to Jeff as part of a Ch 7 Section 368 transaction- what are the tax issues to ABC and to Jeff:

2. A: Taxpayer puts in $1,000,000 of assets (FMV) into a corporation in exchange for common stock.His basis is $335,000.If this transaction is taxable what is the:

• Realized gain/ loss:
• Recognized gain/ loss:
• Basis in new asset (stock):

B: Taxpayer puts in $1,000,000 of assets (FMV) into a corporation in exchange for common stock.His basis is $1,335,000.If this transaction is deferred under Ch 4 or Ch 7 what is the:

• Realized gain/ loss:
• Recognized gain/ loss:
• Basis in new asset (stock):

C: Taxpayer puts in $1,000,000 of assets (FMV) into a corporation in exchange for common stock.His basis is $835,000.He also gets $250,000 in cash (plus the stock) If this transaction is deferred under Ch 4 or Ch 7 what is the:

• Realized gain/ loss:
• Recognized gain/ loss:
• Basis in new asset (stock) to the shareholder:
• Basis of the assets to the corporation:

3. JJB Corporation, an accrual basis taxpayer, has struggled to survive since its formation, six years ago. As a result, it has a deficit in accumulated E&P at the beginning of the year of $100,000. This year, however, JJB earned a significant profit; taxable income was $500,000 and its EP for the current year is $225,000.Consequently, JJB made one cash distribution (at year end) to Jeff, its sole shareholder:$350,000.What are the tax consequences to the shareholder and to the corporation?

4.A. MDC Corporation (E & P of $800,000) has 1,000 shares of stock outstanding. That stock is held by Jeff (550 shares) and Thomas (450 shares), who are unrelated individuals. Bell redeems 450 of Jeff's shares for $1,000 per share. Jeff paid $600 per share for his Bell stock nine years ago.This is a qualified redemption.

• What is Jeff's realized gain/ loss?
• What is his recognized gain/ loss?
• What is the character of the recognized gain/ loss?

B: See the above problem:Assume this is a taxable event and not a qualified redemption:

• What is Jeff's realized gain/ loss?
• What is his recognized gain/ loss?
• What is the character of the recognized gain/ loss?