Lafayette Corporation distributes $80,000 in cash along with land having a $40,000 adjusted basis and a $70,000 its shareholder, Gus. The corporation has accumulated substantial earnings and profits.
a. What are the tax consequences to Lafayette Corporation?
b. What are the tax consequences to the shareholder?
c. What is the shareholder's basis in the land?

Question

Quizplus · Accepted Answer

The Answer of Lafayette Corporation distributes $80,000 in cash along with land having a $40,000 adjusted basis and a $70,000 its shareholder, Gus. The corporation has accumulated substantial earnings and profits.
a. What are the tax consequences to Lafayette Corporation?
b. What are the tax consequences to the shareholder?
c. What is the shareholder's basis in the land?

Lafayette Corporation Distributes $80,000 in Cash Along with Land Having