Lime Corporation, with E & P of $500,000, distributes land (worth $300,000, adjusted basis of $350,000) to Harry, its sole shareholder. The land is subject to a liability of $120,000, which Harry assumes. What are the tax consequences to Lime and to Harry?
Answer to relevant QuestionsRaven Corporation owns three machines that it uses in its business. It no longer needs two of these machines and is considering distributing them to its two shareholders as a property dividend. The machines have a fair ...Robin Corporation would like to transfer excess cash to its sole shareholder, Adam, who is also an employee. Adam is in the 28% tax bracket, and Robin is in the 34% bracket. Because Adam’s contribution to Robin’s profit ...How would your answer to Problem differ if Julio were a corporate shareholder (in the 34% tax bracket) rather than an individual shareholder and the stock ownership in Gray Corporation represented a 25% interest? In problem ...Compare the tax treatment of liquidating and redemption distributions in terms of the following. a. Recognition of gain or loss by the shareholder. b. Basis of property received by the shareholder. Find a report involving the buyback of common stock by a publicly traded U.S. corporation. In no more than four PowerPoint slides, summarize the transaction, and discuss the tax and finance motivations for the redemption ...
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