Corporation X with an E&P of $100 owns assets with aggregate bases of $50 and FMV of $100. A, sole individual shareholder, has stock in Corporation X whose basis is $25.

Assuming state and federal corporate tax rate of 40%, and individual capital gains rate of 20%, what are tax consequences to A and X upon distribution of those assets in complete liquidation of X? What happens to the E&P?

Answer rating: 100% (QA)

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