Situation a. All- Star Corporation distributes land having a $205,000 FMV and a $95,000 adjusted basis...

   

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Situation a. All- Star Corporation distributes land having a $205,000 FMV and a $95,000 adjusted basis to Sharon, its sole shareholder. The land, a capital asset, is subject to a $65,000 mortgage, which Sharon assumes. Shareholder's Change necessary Gain or loss recognized basis for to improve the Shareholder Property Amount Character property received tax consequences a. Sharon Land a. All - Star Corporation distributes land having a $205,000 FMV and a $95,000 adjusted basis to Sharon, its sole shareholder. The land, a capital asset, is subject to a $65,000 mortgage, which Sharon assumes. b. Donaldson Corporation distributes depreciable property to its two equal shareholders. Nate receives a milling machine having a $55,000 adjusted basis and a $65,000 FMV. The corporation claimed $50,000 depreciation on the machine. The corporation purchased the milling machine from an unrelated seller four years ago. Brenda receives an automobile that originally cost $41,500 two years earlier and has a $26,500 FMV. The corporation claimed $26,000 depreciation on the automobile. c. Berkner Corporation distributes marketable securities having a $300,000 FMV and a $465,000 adjusted basis to Brian, a 66.67% shareholder. Berkner purchased the marketable securities three years ago. Berkner distributes $150,000 cash to Tanya, a 33.33% shareholder. d. Assume the same facts as in Part c except the securities and cash are instead each distributed two-thirds to Brian and one-third to Tanya. Situation a. All- Star Corporation distributes land having a $205,000 FMV and a $95,000 adjusted basis to Sharon, its sole shareholder. The land, a capital asset, is subject to a $65,000 mortgage, which Sharon assumes. Shareholder's Change necessary Gain or loss recognized basis for to improve the Shareholder Property Amount Character property received tax consequences a. Sharon Land a. All - Star Corporation distributes land having a $205,000 FMV and a $95,000 adjusted basis to Sharon, its sole shareholder. The land, a capital asset, is subject to a $65,000 mortgage, which Sharon assumes. b. Donaldson Corporation distributes depreciable property to its two equal shareholders. Nate receives a milling machine having a $55,000 adjusted basis and a $65,000 FMV. The corporation claimed $50,000 depreciation on the machine. The corporation purchased the milling machine from an unrelated seller four years ago. Brenda receives an automobile that originally cost $41,500 two years earlier and has a $26,500 FMV. The corporation claimed $26,000 depreciation on the automobile. c. Berkner Corporation distributes marketable securities having a $300,000 FMV and a $465,000 adjusted basis to Brian, a 66.67% shareholder. Berkner purchased the marketable securities three years ago. Berkner distributes $150,000 cash to Tanya, a 33.33% shareholder. d. Assume the same facts as in Part c except the securities and cash are instead each distributed two-thirds to Brian and one-third to Tanya. Situation a. All- Star Corporation distributes land having a $205,000 FMV and a $95,000 adjusted basis to Sharon, its sole shareholder. The land, a capital asset, is subject to a $65,000 mortgage, which Sharon assumes. Shareholder's Change necessary Gain or loss recognized basis for to improve the Shareholder Property Amount Character property received tax consequences a. Sharon Land a. All - Star Corporation distributes land having a $205,000 FMV and a $95,000 adjusted basis to Sharon, its sole shareholder. The land, a capital asset, is subject to a $65,000 mortgage, which Sharon assumes. b. Donaldson Corporation distributes depreciable property to its two equal shareholders. Nate receives a milling machine having a $55,000 adjusted basis and a $65,000 FMV. The corporation claimed $50,000 depreciation on the machine. The corporation purchased the milling machine from an unrelated seller four years ago. Brenda receives an automobile that originally cost $41,500 two years earlier and has a $26,500 FMV. The corporation claimed $26,000 depreciation on the automobile. c. Berkner Corporation distributes marketable securities having a $300,000 FMV and a $465,000 adjusted basis to Brian, a 66.67% shareholder. Berkner purchased the marketable securities three years ago. Berkner distributes $150,000 cash to Tanya, a 33.33% shareholder. d. Assume the same facts as in Part c except the securities and cash are instead each distributed two-thirds to Brian and one-third to Tanya. Situation a. All- Star Corporation distributes land having a $205,000 FMV and a $95,000 adjusted basis to Sharon, its sole shareholder. The land, a capital asset, is subject to a $65,000 mortgage, which Sharon assumes. Shareholder's Change necessary Gain or loss recognized basis for to improve the Shareholder Property Amount Character property received tax consequences a. Sharon Land a. All - Star Corporation distributes land having a $205,000 FMV and a $95,000 adjusted basis to Sharon, its sole shareholder. The land, a capital asset, is subject to a $65,000 mortgage, which Sharon assumes. b. Donaldson Corporation distributes depreciable property to its two equal shareholders. Nate receives a milling machine having a $55,000 adjusted basis and a $65,000 FMV. The corporation claimed $50,000 depreciation on the machine. The corporation purchased the milling machine from an unrelated seller four years ago. Brenda receives an automobile that originally cost $41,500 two years earlier and has a $26,500 FMV. The corporation claimed $26,000 depreciation on the automobile. c. Berkner Corporation distributes marketable securities having a $300,000 FMV and a $465,000 adjusted basis to Brian, a 66.67% shareholder. Berkner purchased the marketable securities three years ago. Berkner distributes $150,000 cash to Tanya, a 33.33% shareholder. d. Assume the same facts as in Part c except the securities and cash are instead each distributed two-thirds to Brian and one-third to Tanya. Situation a. All- Star Corporation distributes land having a $205,000 FMV and a $95,000 adjusted basis to Sharon, its sole shareholder. The land, a capital asset, is subject to a $65,000 mortgage, which Sharon assumes. Shareholder's Change necessary Gain or loss recognized basis for to improve the Shareholder Property Amount Character property received tax consequences a. Sharon Land a. All - Star Corporation distributes land having a $205,000 FMV and a $95,000 adjusted basis to Sharon, its sole shareholder. The land, a capital asset, is subject to a $65,000 mortgage, which Sharon assumes. b. Donaldson Corporation distributes depreciable property to its two equal shareholders. Nate receives a milling machine having a $55,000 adjusted basis and a $65,000 FMV. The corporation claimed $50,000 depreciation on the machine. The corporation purchased the milling machine from an unrelated seller four years ago. Brenda receives an automobile that originally cost $41,500 two years earlier and has a $26,500 FMV. The corporation claimed $26,000 depreciation on the automobile. c. Berkner Corporation distributes marketable securities having a $300,000 FMV and a $465,000 adjusted basis to Brian, a 66.67% shareholder. Berkner purchased the marketable securities three years ago. Berkner distributes $150,000 cash to Tanya, a 33.33% shareholder. d. Assume the same facts as in Part c except the securities and cash are instead each distributed two-thirds to Brian and one-third to Tanya. Situation a. All- Star Corporation distributes land having a $205,000 FMV and a $95,000 adjusted basis to Sharon, its sole shareholder. The land, a capital asset, is subject to a $65,000 mortgage, which Sharon assumes. Shareholder's Change necessary Gain or loss recognized basis for to improve the Shareholder Property Amount Character property received tax consequences a. Sharon Land a. All - Star Corporation distributes land having a $205,000 FMV and a $95,000 adjusted basis to Sharon, its sole shareholder. The land, a capital asset, is subject to a $65,000 mortgage, which Sharon assumes. b. Donaldson Corporation distributes depreciable property to its two equal shareholders. Nate receives a milling machine having a $55,000 adjusted basis and a $65,000 FMV. The corporation claimed $50,000 depreciation on the machine. The corporation purchased the milling machine from an unrelated seller four years ago. Brenda receives an automobile that originally cost $41,500 two years earlier and has a $26,500 FMV. The corporation claimed $26,000 depreciation on the automobile. c. Berkner Corporation distributes marketable securities having a $300,000 FMV and a $465,000 adjusted basis to Brian, a 66.67% shareholder. Berkner purchased the marketable securities three years ago. Berkner distributes $150,000 cash to Tanya, a 33.33% shareholder. d. Assume the same facts as in Part c except the securities and cash are instead each distributed two-thirds to Brian and one-third to Tanya.

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The capital gain is determined by subtracting the adjusted basis from the fair mark value FMV Chara... View the full answer