Question
Abel Corp., an S corp., distributes property to a shareholder named Jay. Immediately before the distribution, the basis of Jay's investment in Abel Corp. totaled
Abel Corp., an S corp., distributes property to a shareholder named Jay. Immediately before the distribution, the basis of Jay's investment in Abel Corp. totaled $31,000. Additional information follows:
Adjusted basis of the property at the distribution date: $20,000
FMV of the property at the distribution date: $19,000
a. What is Jay's basis in his stock investment after the distribution?
b. What is Jay's basis in the property after the distribution?
c. What amount of loss would Abel Corp. recognize as a result of the distribution?
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
