In each of the following situations complete the blanks

Distribution (cash)	S/H Basis in Stock	Corporate E&P	Dividend	Return of Capital	Capital Gain
50,000	20,000	500,000
200,000	50,000	20,000
100,000	20,000	300,000
130,000	500,000	20,000
130,000	500,000	500,000
700,000	800,000	20,000
20,000	800,000	500,000

XYZ Corporation has one shareholder. The shareholder’s tax basis in his shares is $60,000. Corporate E&P BEFORE the effects of any distribution is $10,000. The corporation distributes the following property. Explain the tax effect to the corporation and to the sole shareholder. The corporation distributes land with a FMV of $120,000 and a tax basis to the corporation of $70,000.

Answer rating: 100% (QA)

Return of Capital Distribution cash SH Basis in Stock Corporate EP Dividend Tax free return of basis ... View the full answer