During the current year, Delta Corporation distributes the assets listed below to its sole shareholder, Jessica. (Click the icon to view the list of distributed assets.) Assume that Delta has an E&P balance exceeding the amount distributed and is subject to a 21% tax rate. Unless stated otherwise, adjusted bases for taxable income and E&P purposes are the same. Read the requirement ... Begin by completing the table for distributions a, b, and C. (Abbreviations used: Inc = Increase, dec = decrease.) Jessica Delta Corporation - X More Info Amount of Character of Amount of Character Inc or dec Amount of distribution distribution Basis gain or loss of gain or loss to E&P E&P change a. Requirement a. A parcel of land used in Delta's business that has a $450,000 FMV and a $340,000 adjusted basis b. Assume the same facts as in Part a except that the land is subject to a $150,000 mortgage c. FIFO inventory having a $26,000 FMV and a $14,000 adjusted basis. d. A building used in Delta's business having an original cost of $180,000, a $500,000 FMV, and a $125,000 adjusted basis for taxable income purposes. Delta has claimed $55,000 of depreciation for taxable income purposes under the straight-line method. Depreciation for E&P purposes is $48,000. e. An automobile used in Delta's business having an original cost of $16,000, a $14,000 FMV, and a $7,680 adjusted basis. For taxable income purposes, Delta has claimed $8,320 of MACRS depreciation on the automobile. For E&P purposes, depreciation is $6,900 f. Installment obligations having a $51,000 face amount (and FMV) and a $38,500 adjusted basis. The obligations were created when Delta sold a Sec. 1231 asset. For each asset listed, determine the gross income recognized by Jessica, her basis in the asset, the amount of gain or loss recognized by Delta, and the effect of the distribution on Delta's E&P. Print Done Print Done During the current year, Delta Corporation distributes the assets listed below to its sole shareholder, Jessica. (Click the icon to view the list of distributed assets.) Assume that Delta has an E&P balance exceeding the amount distributed and is subject to a 21% tax rate. Unless stated otherwise, adjusted bases for taxable income and E&P purposes are the same. Read the requirement ... Begin by completing the table for distributions a, b, and C. (Abbreviations used: Inc = Increase, dec = decrease.) Jessica Delta Corporation - X More Info Amount of Character of Amount of Character Inc or dec Amount of distribution distribution Basis gain or loss of gain or loss to E&P E&P change a. Requirement a. A parcel of land used in Delta's business that has a $450,000 FMV and a $340,000 adjusted basis b. Assume the same facts as in Part a except that the land is subject to a $150,000 mortgage c. FIFO inventory having a $26,000 FMV and a $14,000 adjusted basis. d. A building used in Delta's business having an original cost of $180,000, a $500,000 FMV, and a $125,000 adjusted basis for taxable income purposes. Delta has claimed $55,000 of depreciation for taxable income purposes under the straight-line method. Depreciation for E&P purposes is $48,000. e. An automobile used in Delta's business having an original cost of $16,000, a $14,000 FMV, and a $7,680 adjusted basis. For taxable income purposes, Delta has claimed $8,320 of MACRS depreciation on the automobile. For E&P purposes, depreciation is $6,900 f. Installment obligations having a $51,000 face amount (and FMV) and a $38,500 adjusted basis. The obligations were created when Delta sold a Sec. 1231 asset. For each asset listed, determine the gross income recognized by Jessica, her basis in the asset, the amount of gain or loss recognized by Delta, and the effect of the distribution on Delta's E&P. Print Done Print Done
