Question
Gamma Corporation distributes land to its sole shareholder, Lisa. The land has a basis to the corporation of $20,000 and a fair market value of
Gamma Corporation distributes land to its sole shareholder, Lisa. The land has a basis to the corporation of $20,000 and a fair market value of $50,000. There is a $35,000 mortgage on the land which the shareholder agrees to assume. Before this distribution, Gamma has current E&P of $5,000 and accumulated E&P of $4,000.
How much gain does Gamma Corporation recognize as a result of this distribution?
How much dividend income does Lisa recognize as a result of this distribution?
What is Lisas basis for the land?
What is Gamma Corporations E&P after the distribution?
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Investment Analysis And Portfolio Management
Authors: Frank K. Reilly, Keith C. Brown
7th Edition
0324171730, 978-0324171730
