6-38 - $180,000 (d) Teal Taxable Gain = FMV Basis = 250,000...

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ACCT 467 Kristen Jack Chapter 6 – Problem 38 2/21/2012 Distribution (Property) Basis = $180,000 FMV = $250,000 Grace (shareholder) 28% (a) Grace Taxable Dividend & Basis in Property = FMV = $250,000 Teal Taxable Gain = FMV – Basis = 250,000 – 180,000 = $70,000 (b) Teal Taxable Gain = FMV – Basis = 250,000 – 180,000 = $70,000 Taxed = 20% * 250,000 = $50,000 (c) Teal Taxable Gain = FMV – Basis = 250,000 – 180,000 = $70,000 Grace Basis in Property = 250,000 Grace Capital Gain = FMV – Basis in Stock = 250,000 – 70,000 =
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Unformatted text preview: $180,000 (d) Teal Taxable Gain = FMV Basis = 250,000 180,000 = $70,000 Grace Basis in Property = 250,000 Grace Corporation Capital Gain = FMV Basis in Stock = 250,000 70,000 = $180,000 (e) Teal Corporation would be fine with any option because they are all the same. Grace would want to choose (c) because of the quantifying stock redemption (which she would receive as an individual, rather than as a corporation). She will have a gain of $180,000....
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This note was uploaded on 02/22/2012 for the course ACCT 467 taught by Professor Ruhupatty during the Spring '12 term at Andrews Univeristy.

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