The Dicken Corp. has two unrelated shareholders, Dick and Ken, each owning 50 percent of the stock.

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The Dicken Corp. has two unrelated shareholders, Dick and Ken, each owning 50 percent of the stock. Dicken has only one asset, a tract of land with a value of

$130,000 that was purchased for $150,000.

What are the tax consequences of the following alternative liquidations?

a. Dicken distributes the land to the shareholders as equal tenants in common.

b. Dicken sells the land to Ken’s mother-in-law for a note that is distributed to Dick and Ken as equal tenants in common.

c. Same as part

a. except that Dick is Ken’s father.

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CCH Federal Taxation Basic Principles 2020

ISBN: 9780808051787

2020 Edition

Authors: Ephraim P. Smith, Philip J. Harmelink, James R. Hasselback

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Question Posted: Feb 27, 2024 03:06 AM

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The Dicken Corp. has two unrelated shareholders, Dick and Ken, each owning 50 percent of the stock.

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Answer a Dicken distributes the land to the shareholders as equal tenants in common This distributio...View the full answer

CCH Federal Taxation Basic Principles 2020

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