Question
MPC Corporation makes a property distribution on 12/31/16 to its sole shareholder, Jon. The property distributed is a house (fair market value of $500,000; basis
MPC Corporation makes a property distribution on 12/31/16 to its sole shareholder, Jon. The property distributed is a house (fair market value of $500,000; basis of $300,000) that is subject to a $50,000 mortgage that Jon assumes. Before considering the consequences of the distribution, MPCs current E & P before the distribution is $75,000 and its accumulated E & P is 100,000. MPC makes no other distributions during the current year.
What is MPCs taxable gain on the distribution of the house?
What is MPCs current E&P after the distribution on 12/31/16?
What is Jons taxable gain (if any) and what type of gain is it?
What is Jons basis in the house?
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Fundamentals of Cost Accounting
Authors: William Lanen, Shannon Anderson, Michael Maher
3rd Edition
9780078025525, 9780077517359, 77517350, 978-0077398194
