Wills Corporation, which has accumulated a current E&P totaling $70,000, distributes land to its sole shareholder, an individual. The land has an FMV of $75,000 and an adjusted basis of $60,000. The shareholder assumes a $15,000 liability associated with the land. The transaction will have the following tax consequences.

A. The corporation will recognize a $15,000 gain; the shareholder will recognize dividend income of $75,000.
B. The corporation will recognize a $15,000 gain; the shareholder will recognize dividend income of $60,000.
C. The corporation will recognize no gain; the shareholder will recognize dividend income of $75,000.
D. The corporation will recognize no gain; the shareholder will recognize dividend income of $60,000.


Answer: B

Business

You might also like to view...

Discuss how service firms can minimize non-monetary purchase costs

What will be an ideal response?

Business

Choose the correct word or words in parentheses. (There, Their, They're) are interesting opportunities in wireless communications occupations

Business

Identify Ohno's Seven Wastes

What will be an ideal response?

Business

The _____ of an investment is a measure of the tightness, or variability, of its set of returns.

A. correlation coefficient B. standard deviation of the returns C. beta coefficient D. coefficient of variation E. expected return

Business