On September 30, Silver Corporation, a calendar year taxpayer, sold a parcel of land (basis of $400,000)

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On September 30, Silver Corporation, a calendar year taxpayer, sold a parcel of land (basis of $400,000) for a $1 million note. The note is payable in five installments, with the first payment due next year. Because Silver did not elect out of the installment method, none of the $600,000 gain is taxed this year.
Silver Corporation had a $300,000 deficit in accumulated E & P at the beginning of the year. Before considering the effect of the land sale, Silver had a deficit in current E & P of $50,000.
Sam, the sole shareholder of Silver, has a basis of $200,000 in his stock. If Silver distributes $900,000 to Sam on December 31, how much income must he report for tax purposes?
Corporation
A 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...
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South Western Federal Taxation 2016 Corporations Partnerships Estates And Trusts

ISBN: 9781305399884

39th Edition

Authors: James Boyd, William Hoffman, Raabe, David Maloney, Young

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