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Stark Corporation is owned 85 percent by Sansa and 15 percent by Bran Corporation. Sansa has a basis in her stock of $36,000 and Bran

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Stark Corporation is owned 85 percent by Sansa and 15 percent by Bran Corporation. Sansa has a basis in her stock of $36,000 and Bran Corporation has a basis in its stock of $10,500. Stark Corporation has accumulated earnings and profits of $144,000 on January 1, 2019. Stark Corporation also has taxable income of $57,600 for 2019 before taking into account the distributions below to its shareholders. On December 31, 2019, Stark Corporation distributed: (1) Land to Sansa with a fair market value of $306,000, an adjusted basis to Stark Corporation of $171,000, and subject to a liability of $15,000 that Sansa assumed; and (2) Inventory to Bran Corporation with a fair market value of $51,353 and an adjusted basis of $72,000. Stark Corporation also has the following information for 2019: $7,200 - Tax-exempt interest income - Excess charitable contributions not deductible in 2019... 2000 ....................... 36,000 Net long-term capital loss....... ................. 10,800 Dividends received deduction......... ................ 14,400 Give the tax consequences of the above distributions to each shareholder and to Stark Corporation assuming that Stark Corporation's total federal income tax liability for 2019, including the tax on any gain due to the above distributions, is $40,446, Stark Corporation is owned 85 percent by Sansa and 15 percent by Bran Corporation. Sansa has a basis in her stock of $36,000 and Bran Corporation has a basis in its stock of $10,500. Stark Corporation has accumulated earnings and profits of $144,000 on January 1, 2019. Stark Corporation also has taxable income of $57,600 for 2019 before taking into account the distributions below to its shareholders. On December 31, 2019, Stark Corporation distributed: (1) Land to Sansa with a fair market value of $306,000, an adjusted basis to Stark Corporation of $171,000, and subject to a liability of $15,000 that Sansa assumed; and (2) Inventory to Bran Corporation with a fair market value of $51,353 and an adjusted basis of $72,000. Stark Corporation also has the following information for 2019: $7,200 - Tax-exempt interest income - Excess charitable contributions not deductible in 2019... 2000 ....................... 36,000 Net long-term capital loss....... ................. 10,800 Dividends received deduction......... ................ 14,400 Give the tax consequences of the above distributions to each shareholder and to Stark Corporation assuming that Stark Corporation's total federal income tax liability for 2019, including the tax on any gain due to the above distributions, is $40,446

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