Castle and Dorabella formed an S corporation; Castle owns 75% of the outstanding shares, and Dorabella owns

Question:

Castle and Dorabella formed an S Castle owns 75% of the outstanding shares, and Dorabella owns the rest. When the entity's AAA balance is $1 million, it distributes an asset to each shareholder; the basis of each asset to the is $45,000. Castle's asset is worth $90,000, and Dorabella's is worth $50,000. Determine the indicated amounts that result from the distribution.
a. The corporation's recognized gain, if any.
b. Dorabella's recognized gross income.
c. Castle's recognized gross income.
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...