2. T corporation (e & p $800,000) has 1,000 shares of stock outstanding. The shares are owned as followed: james 600 shares; stephanie (james sister) 300 shares; luke (james son) 100 shares. T corporation owns land (basis of $300,000, fmv of $260,000) that it purchased as an investment 10 years ago. James had a basis of $275,000 in his shares. What are the tax consequences for both t cororation and james if the distribution is: a qualified stock redemption? b. liquidating distribution?

2. T corporation (e & p $800,000) has 1,000 shares of stock outstanding. The shares are owned as followed: james 600 shares; stephanie (james sister) 300 shares; luke (james son) 100 shares. T corporation owns land (basis of $300,000, fmv of $260,000) that it purchased as an investment 10 years ago. James had a basis of $275,000 in his shares. What are the tax consequences for both t cororation and james if the distribution is: a qualified stock redemption? b. liquidating distribution?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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