2. Under IRC Section 311(b)(2), when a corporation distributes a property, subject to a liability, or the

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Under IRC Section 311(b)(2), when a corporation distributes a property, subject to a liability, or the shareholder assumes the obligation of the distributing corporation, the fair market value (FMV) of the property is at least equal to the amount of the liability.

• Assume your client made a non-liquidating distribution with FMV exceeding its adjusted basis.

• What are the potential tax effects to the distributing company (client) and the receivers (shareholders)?

• Propose a plan in which you mitigate the potential tax impact on your client and the shareholders.

Related Book For answer-question

Canadian Income Taxation planning and decision making

ISBN: 9781259094330

17th edition 2014-2015 version

Authors: Joan Kitunen, William Buckwold

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Posted Date: Feb 28, 2021 11:04 AM

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2. Under IRC Section 311(b)(2), when a corporation distributes a property, subject to a liability, or the

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Nonliquidating distributions refer to distributions of either cash or property by a continuing corporation to its shareholders Such distribution can l... View the full answer

Canadian Income Taxation planning and decision making

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