Pamela owns 100% of Sigma Corporations stock. She purchased her stock ten years ago, and her current
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¢ The corporation has claimed depreciation of $150,000 on the equipment.
¢ The corporation received the marketable securities as a capital contribution from Pamela three years earlier at a time when their adjusted basis was $90,000 and their FMV was $70,000.
¢ Sigma incurred $20,000 in liquidation expenses in its final tax year.
a. What are the tax consequences of the liquidation to Pamela and Sigma Corporation? Assume a 34% corporate tax rate.
b. How would your answer change if Pamela contributed the marketable securities six years ago?
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Related Book For
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
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