Abel Corp., an S corp., distributes property to a shareholder named Jay. Immediately before the distribution, the basis of Jay's investment in Abel Corp. totaled $31,000. Additional information follows: Adjusted basis of the property at the distribution date: $20,000 FMV of the property at the distribution date: $19,000 a. What is Jay's basis in his stock investment after the distribution? b. What is Jay's basis in the property after the distribution? c. What amount of loss would Abel Corp. recognize as a result of the distribution?
Abel Corp., an S corp., distributes property to a shareholder named Jay. Immediately before the distribution, the basis of Jay's investment in Abel Corp. totaled $31,000. Additional information follows: Adjusted basis of the property at the distribution date: $20,000 FMV of the property at the distribution date: $19,000 a. What is Jay's basis in his stock investment after the distribution? b. What is Jay's basis in the property after the distribution? c. What amount of loss would Abel Corp. recognize as a result of the distribution?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter12: Corporations: Organization, Capital Structure, And Operating Rules
Section: Chapter Questions
Problem 22P
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Transcribed Image Text:Abel Corp., an S corp., distributes property to a shareholder named Jay. Immediately before the distribution,
the basis of Jay's investment in Abel Corp. totaled $31,000. Additional information follows:
Adjusted basis of the property at the distribution date: $20,000
FMV of the property at the distribution date:
$19,000
a. What is Jay's basis in his stock investment after the distribution?
b. What is Jay's basis in the property after the distribution?
c. What amount of loss would Abel Corp. recognize as a result of the distribution?
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