Vogel, Inc., an S corporation for five years, distributes a tract of land held as an investment
Question:
Vogel, Inc., an S corporation for five years, distributes a tract of land held as an investment to Jamari, its majority shareholder. The land was purchased for $45,000 ten years ago and is currently worth $120,000.
a. As a result of the distribution, what is Vogel’s recognized capital gain? How much is reported as a distribution to shareholders?
b. What is the net effect of the distribution on Vogel’s AAA?
c. Assume instead that the land had been purchased for $120,000 and was currently worth $45,000. How much would Vogel recognize as a loss? What would be the net effect on Vogel’s AAA? What would be Jamari’s basis in the land?
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Step by Step Answer:
a Vogel recognizes a capital gain of 75000 120000 45000 which increases th...View the full answer
South Western Federal Taxation 2018 Corporations Partnerships Estates And Trusts
ISBN: 1389
41st Edition
Authors: William H. Hoffman, William A. Raabe, James C. Young, Annette Nellen, David M. Maloney
