Question
Alabama Corporation, an S corporation, liquidates this year by distributing a parcel of land to its sole shareholder, Mark Ingram. The fair market value of
Alabama Corporation, an S corporation, liquidates this year by distributing a parcel of land to its sole shareholder, Mark Ingram. The fair market value of the parcel is $70,400, and its tax basis is $44,400. Marks basis in his stock is $35,800.
b. How much gain must Mark recognize (if any) as a result of the distribution, and what is his basis in the land?
c. Assume the fair market value of the land is $32,000 rather than $70,400. What amount of gain or loss, if any, does Alabama Corporation recognize on the distribution?
d. Assume the fair market value of the land is $32,000 rather than $70,400. How much gain must Mark recognize (if any) as a result of the distribution, and what is his basis in the land?
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Fundamental Accounting Principles Volume II
Authors: Larson Kermit, Jensen Tilly
14th Canadian Edition
978-1259066511
