Lilah owns 100 % of Lilah Inc (LI). Her basis in her shares is $100,000 On...

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Lilah owns 100 % of Lilah Inc (LI). Her basis in her shares is $100,000 On January1, 2019 LI has an accumulated deficit of $800,000. In 2019 LI has current earnings and profits of $ 900,000. On December 31, 2019 Lilah receives a distribution of land with a fair market value of $1,000,000 and a tax basis of $700,000 from LI What amount of dividend income will Lilah report on her 2019 tax return ? O A. S700,000 O B. $100,000 OC. S00,000 OD. $1,000,000 Lilah owns 100 % of Lilah Inc (LI). Her basis in her shares is $100,000 On January1, 2019 LI has an accumulated deficit of $800,000. In 2019 LI has current earnings and profits of $ 900,000. On December 31, 2019 Lilah receives a distribution of land with a fair market value of $1,000,000 and a tax basis of $700,000 from LI What amount of dividend income will Lilah report on her 2019 tax return ? O A. S700,000 O B. $100,000 OC. S00,000 OD. $1,000,000

Answer rating: 100% (QA)

The dividend both property and cash are assumed to be paid first out of current year Profits a... View the full answer