C12-Chp-05-1B-NonLiquidating Cash Dist-Prb-and-Sol

C12-Chp-05-1B-NonLiquidating Cash Dist-Prb-and-Sol -...

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3103f7f1bc7b7c22dd5fed3bee79659135fd550d.xls Page 1 of 2 Non-Liquidating Distributions by C Corporation Joe owns 100% of a business. Joe has a basis of $18,000 in the entity. Joe take a "current" distribution of $30,000 in cash. Assets Basis FMV Cash $40,000 $40,000 Land $10,000 $25,000 Total $50,000 $65,000 Debt and Equity Debt $27,000 Common Stock $18,000 $5,000 Total $50,000 1. Cash distributed to Joe $30,000 3. Distribution in excess of Dividend 4. Adjusted basis of stock before distribution 5. Tax-free return of stock basis Sec. 301( c)(2) 6. Joe's capital gain. Sec. 301( c)(3) 7. Joe's ending basis in corporate stock C Corporation (Distributions- Sec. 301, 312(a),(b), 316, 317) 1 Sec. 301 covers "property" distributions, defined in 317. 301 a Sec. 317: "property" is everything "except stock dividend." 317 2
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This note was uploaded on 03/09/2012 for the course ACCT 6120 taught by Professor Godfrey,h during the Spring '08 term at UNC Charlotte.

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C12-Chp-05-1B-NonLiquidating Cash Dist-Prb-and-Sol -...

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