Consider the following situations. (Click the icon to review each of the situations.) Read the equiremen (Round your answers to the nearest whole dollar. If a shareholder does not have change necessary, make sure to select an answer for each scenario.) basis in the property stated, leave the box empty; do not enter a zero. For the type of ... Situation a. Premium Corporation distributes land having a $205,000 FMV and a $65,000 adjusted basis to Laurel, its sole shareholder. The land, a capital asset, is subject to a $50,000 mortgage, which Laurel assumes. (Click the icon to view the possible changes necessary to improve the tax consequences.) Gain or loss recognized Shareholder's Change necessary basis for to improve the property received tax consequences Shareholder Property Amount Character a. Laurel Land Situation b. Preston Corporation distributes depreciable property to its two equal shareholders. Sam receives a milling machine having a $75,000 adjusted basis and a $90,000 FMV. The corporation claimed $50,000 depreciation on the machine. The corporation purchased the milling machine from an unrelated seller four years ago. Ann receives an automobile that originally cost $43,000 two years earlier and has a $24,500 FMV. The corporation claimed $23,500 depreciation on the automobile. A (Click the icon to view the possible changes necessary to improve the tax consequences.) Gain or loss recognized Shareholder's Change necessary basis for to improve the property received tax consequences Amount Character Shareholder Property b. Sam Milling machine Ann Automobile 7 Situation c. Bentfield Corporation distributes marketable securities having a $180,000 FMV and a $290,000 adjusted basis to Evan, a 66.67% shareholder. Bentfield purchased the marketable securities three years ago. Bentfield distributes 590,000 cash to Rachel, a 33.33% shareholder. (Click the icon to view the possible changes necessary to improve the tax consequences.) Gain or loss recognized Character Shareholder's Change necessary basis for to improve the property received tax consequences Shareholder Property Amount C Evan Marketable securities Cash Rachel Marketable securities Cash Situation d. Bentfield Corporation distributes marketable securities having a $180,000 FMV and a $290,000 adjusted basis and cash of $90,000. Bentfield purchased the marketable securities three years ago. Evan is a 66.67% shareholder and Rachel a 33.33% shareholder. Assume the securities and cash are each distributed two-thirds to Evan and one-third to Rachel. A (Click the icon to view the possible changes necessary to improve the tax consequences.) Shareholder's Change necessary Gain or loss recognized basis for to improve the property received tax consequences Shareholder Property Amount Character d. Evan Marketable securities Rachel Cash Marketable securities Cash Requirement What are the amount and character of the gain or loss recognized by the distributing corporation when making liquidating distributions in the situations? What is the shareholder's basis for the property received? In any situation where a loss is disallowed indicate what changes would be necessary to improve the tax consequences of the transaction. Print Done Consider the following situations. (Click the icon to review each of the situations.) Read the equiremen (Round your answers to the nearest whole dollar. If a shareholder does not have change necessary, make sure to select an answer for each scenario.) basis in the property stated, leave the box empty; do not enter a zero. For the type of ... Situation a. Premium Corporation distributes land having a $205,000 FMV and a $65,000 adjusted basis to Laurel, its sole shareholder. The land, a capital asset, is subject to a $50,000 mortgage, which Laurel assumes. (Click the icon to view the possible changes necessary to improve the tax consequences.) Gain or loss recognized Shareholder's Change necessary basis for to improve the property received tax consequences Shareholder Property Amount Character a. Laurel Land Situation b. Preston Corporation distributes depreciable property to its two equal shareholders. Sam receives a milling machine having a $75,000 adjusted basis and a $90,000 FMV. The corporation claimed $50,000 depreciation on the machine. The corporation purchased the milling machine from an unrelated seller four years ago. Ann receives an automobile that originally cost $43,000 two years earlier and has a $24,500 FMV. The corporation claimed $23,500 depreciation on the automobile. A (Click the icon to view the possible changes necessary to improve the tax consequences.) Gain or loss recognized Shareholder's Change necessary basis for to improve the property received tax consequences Amount Character Shareholder Property b. Sam Milling machine Ann Automobile 7 Situation c. Bentfield Corporation distributes marketable securities having a $180,000 FMV and a $290,000 adjusted basis to Evan, a 66.67% shareholder. Bentfield purchased the marketable securities three years ago. Bentfield distributes 590,000 cash to Rachel, a 33.33% shareholder. (Click the icon to view the possible changes necessary to improve the tax consequences.) Gain or loss recognized Character Shareholder's Change necessary basis for to improve the property received tax consequences Shareholder Property Amount C Evan Marketable securities Cash Rachel Marketable securities Cash Situation d. Bentfield Corporation distributes marketable securities having a $180,000 FMV and a $290,000 adjusted basis and cash of $90,000. Bentfield purchased the marketable securities three years ago. Evan is a 66.67% shareholder and Rachel a 33.33% shareholder. Assume the securities and cash are each distributed two-thirds to Evan and one-third to Rachel. A (Click the icon to view the possible changes necessary to improve the tax consequences.) Shareholder's Change necessary Gain or loss recognized basis for to improve the property received tax consequences Shareholder Property Amount Character d. Evan Marketable securities Rachel Cash Marketable securities Cash Requirement What are the amount and character of the gain or loss recognized by the distributing corporation when making liquidating distributions in the situations? What is the shareholder's basis for the property received? In any situation where a loss is disallowed indicate what changes would be necessary to improve the tax consequences of the transaction. Print Done