Corporation distributes depreciable property to its two equal shareholders. Matt receives a milling machine having a $60,000 adjusted basis and a $95,000 FMV. The corporation claimed $45,000 depreciation on the machine. The corporation purchased the milling machine from an unrelated seller four years ago. Laurel receives an automobile that originally cost $43,500 two years earlier and has a $29,000 FMV. The corporation claimed $27,500 depreciation on the automobile.

HOW WAS $13000 CALCULATED?
 

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Shareholder's Change necessary Gain or loss recognized basis for to improve the Shareholder Property Amount Character property received tax consequences b. Matt Milling machine 35,000 Ordinary income 95,000 Laurel Automobile 13,000 Ordinary income 29,000 Shareholder's Change necessary Gain or loss recognized basis for to improve the Shareholder Property Amount Character property received tax consequences b. Matt Milling machine 35,000 Ordinary income 95,000 Laurel Automobile 13,000 Ordinary income 29,000