The Coffee Company engages in the following transactions during the taxable year. Sells stock held for

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The Coffee Company engages in the following transactions during the taxable year.
• Sells stock held for three years as an investment for $30,000 (adjusted basis of $20,000).
• Sells land used in the business for $65,000. The land has been used as a parking lot and originally cost $40,000.
• Receives tax-exempt interest on municipal bonds of $5,000.
• Receives dividends on IBM stock of $80,000.
Describe the effect of these transactions on the entity and its owners if the entity is organized as:
a. A partnership.
b. A C corporation.
c. An S corporation.
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South Western Federal Taxation 2018 Essentials Of Taxation Individuals And Business Entities

ISBN: 9781337386173

21st Edition

Authors: William A. Raabe, James C. Young, Annette Nellen, David M. Maloney

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