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Wells Corporation, which has accumulated a current earning in profit totaling $65,000, distributes land to Mike Johnson. As sole shareholder, the land has a fair
Wells Corporation, which has accumulated a current earning in profit totaling $65,000, distributes land to Mike Johnson. As sole shareholder, the land has a fair market value of $55,000 and an adjusted basis of $35,000. The shareholder assumes a $15,000 liability associated with the land. Mike basis this in the stock before the distribution was $10,000. What are the tax consequences of the distribution for the shareholder
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