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 $96,000 and Prune's basis in her shares was $32,000. During the current year, Dried Fruit Corp. earned $576,000 of net income from operations. Raisin's share was $192,000; Prune's share was $384,000. On December 31st, Dried Fruit Corp. distributed Grapeacre (real property) having a fair market value of $192,000, and a basis of $128,000, to Raisin and Plumacre (real property) having a fair market value of $384,000 and a basis of $352,000, to Prune. How much gain does Prune 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 $96,000 and Prune's basis in her shares was $32,000. During the current year, Dried Fruit Corp. earned $576,000 of net income from operations. Raisin's share was $192,000; Prune's share was $384,000. On December 31st, Dried Fruit Corp. distributed Grapeacre (real property) having a fair market value of $192,000, and a basis of $128,000, to Raisin and Plumacre (real property) having a fair market value of $384,000 and a basis of $352,000, to Prune. How much gain does Prune recognize as a result of this transaction?
Chapter22: S Corporations
Section: Chapter Questions
Problem 36P
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![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 $96,000 and Prune's basis in her
shares was $32,000. During the current year, Dried Fruit Corp. earned $576,000 of net income from operations. Raisin's share was $192,000; Prune's share was
$384,000. On December 31st, Dried Fruit Corp. distributed Grapeacre (real property) having a fair market value of $192,000, and a basis of $128,000, to Raisin and
Plumacre (real property) having a fair market value of $384,000 and a basis of $352,000, to Prune. How much gain does Prune recognize as a result of this
transaction?
O $96,000
O $64,000
O $0
O $32,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fff36f8f7-c1af-4d2c-887e-9ba0e314c4fb%2F6aaa1cfc-d68c-4b29-af48-42106beea83e%2F23ldps_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 $96,000 and Prune's basis in her
shares was $32,000. During the current year, Dried Fruit Corp. earned $576,000 of net income from operations. Raisin's share was $192,000; Prune's share was
$384,000. On December 31st, Dried Fruit Corp. distributed Grapeacre (real property) having a fair market value of $192,000, and a basis of $128,000, to Raisin and
Plumacre (real property) having a fair market value of $384,000 and a basis of $352,000, to Prune. How much gain does Prune recognize as a result of this
transaction?
O $96,000
O $64,000
O $0
O $32,000
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