Tax consequences of a Corporate Liquidation. Marsha owns 100% of Gamma Corporation's common stock. Gamma is an
Question:
Tax consequences of a Corporate Liquidation. Marsha owns 100% of Gamma Corporation's common stock. Gamma is an accrual basis, calendar year corporation. Marsha formed the corporation six years ago transferring $250,000 of cash in exchange for the Gamma stock.
Thus, she has held the stock for six years and has a $250,000 adjusted basis in the stock.
Gamma's balance sheet a January 1 of the current year is a follows:
Gamma has held the marketable securities for two years. In addition, Gamma has claimed $60,000 of MACRS depreciation on the machinery and $90,000 of straight-line depreciation on the building. On January 2 of the current year, Gamma liquidates and distributes all property to Marsha except that Gamma retains cash to pay the accounts payable and any tax liability resulting from Gamma's liquidation. Assume that Gamma has no other taxable income or loss. Determine the tax consequences to Gamma andMarsha.
Balance SheetBalance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... 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...
Step by Step Answer:
Federal Taxation 2021 Corporations, Partnerships, Estates & Trusts
ISBN: 9780135919460
34th Edition
Authors: Timothy J. Rupert, Kenneth E. Anderson, David S. Hulse