In the current year, Simon receives a liquidating cash distribution of $32,000 from Torborg Corporation What is the tax effect of the distribution for Torborg and for Simon if a Simon has a basis in his stock of $42,000 b Simon has a basis in his stock of $19,000 c Assume the same facts as in parts...

The tax law treats a shareholder who receives a distribution of cash in complete liquidation as havi ...

In the current year, Simon receives a liquidating cash distribution of $32,000 from Torborg Corporation. What is

Question:

In the current year, Simon receives a liquidating cash of $32,000 from Torborg Corporation. What is the tax effect of the for Torborg and for Simon if
a. Simon has a basis in his stock of $42,000?
b. Simon has a basis in his stock of $19,000?
c. Assume the same facts as in parts a and b, except that Torborg is an S corporation. What is the tax effect for Torborg and Simon?

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...