Dried Fruit Corp. has had a valid S Corp election in effect at all times since its incorporation. The Dried Fruit Corp. stock is owned one-third by Raisin and two-thirds by Prune. All shareholders are US resident citizen individuals. At the beginning of the current year, Raisin's basis in his shares was $48,000 and Prune's basis in her shares was $16,000. During the current year, Dried Fruit Corp. earned $288,000 of net income from operations. Raisin's share was $96,000; Prune's share was $192,000. On December 31st, Dried Fruit Corp. distributed Grapeacre (real property) having a fair market value of $96,000, and a basis of $64,000, to Raisin and Plumacre (real property) having a fair market value of $192,000 and a basis of $176,000, to Prune. How much gain does Raisin recognize as a result of this transaction?
Dried Fruit Corp. has had a valid S Corp election in effect at all times since its incorporation. The Dried Fruit Corp. stock is owned one-third by Raisin and two-thirds by Prune. All shareholders are US resident citizen individuals. At the beginning of the current year, Raisin's basis in his shares was $48,000 and Prune's basis in her shares was $16,000. During the current year, Dried Fruit Corp. earned $288,000 of net income from operations. Raisin's share was $96,000; Prune's share was $192,000. On December 31st, Dried Fruit Corp. distributed Grapeacre (real property) having a fair market value of $96,000, and a basis of $64,000, to Raisin and Plumacre (real property) having a fair market value of $192,000 and a basis of $176,000, to Prune. How much gain does Raisin recognize as a result of this transaction?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Dried Fruit Corp. has had a valid S Corp election in effect at all times since its incorporation.
The Dried Fruit Corp. stock is owned one-third by Raisin and two-thirds by Prune. All
shareholders are US resident citizen individuals. At the beginning of the current year, Raisin's
basis in his shares was $48,000 and Prune's basis in her shares was $16,000. During the
current year, Dried Fruit Corp. earned $288,000 of net income from operations. Raisin's
share was $96,000; Prune's share was $192,000. On December 31st, Dried Fruit Corp.
distributed Grapeacre (real property) having a fair market value of $96,000, and a basis of
$64,000, to Raisin and Plumacre (real property) having a fair market value of $192,000 and a
basis of $176,000, to Prune. How much gain does Raisin recognize as a result of this
transaction?
$48,000
$16,000
$32,000
$0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7ed123e1-37e6-4f35-81f0-c940c6677b11%2F216b8d74-1ebc-4d32-aa18-e467423f55a1%2F7yj9tx_processed.png&w=3840&q=75)
Transcribed Image Text:Dried Fruit Corp. has had a valid S Corp election in effect at all times since its incorporation.
The Dried Fruit Corp. stock is owned one-third by Raisin and two-thirds by Prune. All
shareholders are US resident citizen individuals. At the beginning of the current year, Raisin's
basis in his shares was $48,000 and Prune's basis in her shares was $16,000. During the
current year, Dried Fruit Corp. earned $288,000 of net income from operations. Raisin's
share was $96,000; Prune's share was $192,000. On December 31st, Dried Fruit Corp.
distributed Grapeacre (real property) having a fair market value of $96,000, and a basis of
$64,000, to Raisin and Plumacre (real property) having a fair market value of $192,000 and a
basis of $176,000, to Prune. How much gain does Raisin recognize as a result of this
transaction?
$48,000
$16,000
$32,000
$0
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