Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dried Fruit Corp. has had a valid S Corp election in effect at all times since its incorporation. The Dried Fruit Corp. stock is owned

Dried Fruit Corp. has had a valid S Corp election in effect at all times since its incorporation. The Dried Fruit Corp. stock is owned one-third by Raisin and two-thirds by Prune. All shareholders are US resident citizen individuals. At the beginning of the current year, Raisins basis in his shares was $114,000 and Prunes basis in her shares was $38,000. During the current year, Dried Fruit Corp. earned $684,000 of net income from operations. Raisins share was $228,000; Prunes share was $456,000. On December 31st, Dried Fruit Corp. distributed Grapeacre (real property) having a fair market value of $228,000, and a basis of $152,000, to Raisin and Plumacre (real property) having a fair market value of $456,000 and a basis of $418,000, to Prune. How much gain does Prune recognize as a result of this transaction?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

How To Audit ISO 9001 2015 A Handbook For Auditors

Authors: Chad Kymal

1st Edition

087389927X, 978-0873899277

More Books

Students also viewed these Accounting questions