Question 4 (1 point)

On October 20, 2017, Acme Corporation distributed property with a fair market value of $500 and an adjusted tax basis of $150 to X, its only shareholder. What, if any gain will Acme recognize and what is Xs basis in the distributed property?

a	$0, $150
b	$500, $500
c	$350, $150
d	$350, $500

Question 5 (1 point)

The dividend that is a noncash distribution is ____________.

a	a qualified dividend
b	a cash dividend
c	a stock dividend
d	a property dividend

Question 6 (1 point)

On August 5, 2018, Acme Corporation made a loan to X, its only shareholder, in the amount of $5000. The loan has no repayment date and did not charge any interest. There is a written loan document supporting this transaction with the terms of the loan clearly stated. During 2018, no dividends were paid. What is a likely outcome for this loan for federal income tax purposes?

a	The loan will be treated as a valid loan. Interest will be inputted so Acme recognizes interest income and X can get an interest expense tax deduction.
b	The loan will be treated as a valid loan. Interest will be inputted so that X recognizes dividend income for the amount of the inputted interest.
c	The IRS will not change the characterization of the loan.
d	The IRS will treat the loan as a constructive dividend.