X Corporation and Y Corporation formed the XY LLC on July 1, Year 1. XCorporation contributed The
Fantastic news! We've Found the answer you've been seeking!
Question:
a) On June 30, Year 8, the XY LLC distributes The Couture to YCorporation. At that time, the basis of The Couture was $4,500,000;its FMV was $14,000,000. Immediately before the distribution, YCorporation's basis in its LLC interest was $15,000,000, and itscapital account also was $15,000,000. X Corporation's basis in itsLLC interest was $9,000,000, and its capital account was$15,000,000.What are the tax consequences to both X Corporation and YCorporation from the distribution?
b) Would your answer above change if the distribution of The Coutureto Y Corporation occurred on July 1, year 8 ( assuming all values andbases remained the same)?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: