Meridian Corporation originally was owned equally by five individual shareholders Four years ago, Meridian adopted a plan of liquidation, and each shareholder received a liquidating distribution Tina, a cash method taxpayer, reported a $30,000 long term capital gain in the prior liquidation year on...

The 5000 held back and placed in escrow is excluded from the calculation of Tinas 3000 ...

Meridian Corporation originally was owned equally by five individual shareholders. Four years ago, Meridian adopted a plan

Question:

Meridian originally was owned equally by five individual shareholders. Four years ago, Meridian adopted a plan of and each shareholder received a liquidating Tina, a cash method taxpayer, reported a $30,000 long-term capital gain in the prior year on the redemption of her stock. Pending the outcome of a lawsuit in which Meridian is one of the defendents, $5,000 of Tina’s liquidating was held back and placed in escrow. Settlement of the lawsuit in the current year requires that the escrowed funds plus the interest earned on these funds be paid out to the plaintiff and that each shareholder pay an additional $2,500. Tina pays the amount due in the next year. How does Tina report the settlement of the lawsuit and the payment of the additional amount?
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... 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... Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....