Homework Help is Here – Start Your Trial Now!
Business
Accounting
Exercise 22-19 (Algorithmic) (LO. 7) Vogel, Inc., an S corporation for five years, distributes a tract of land held as an investment to Jamari, its majority shareholder. The land was purchased for $71,800 ten years ago and is currently worth $179,500. If an amount is zero, enter, "0". a. As a result of the distribution, what is Vogel's recognized capital gain? How much is reported as a distribution to shareholders? Vogel recognizes a capital gain of $ a proportionate share of it passes through to the shareholders land. b. What is the net effect of the distribution on Vogel's AAA? There is a net decrease ✓of $ Vogel recognizes a loss $ would take a $ 107,700 ✓ which is reported on Schedule K, and ✓. Jamari would take a $ 71,800✔ on Vogel's AAA. c. Assume instead that the land had been purchased for $179,500 and was currently worth $71,800. How much would Vogel recognize as a loss? What would be the net effect on Vogel's AAA? What would be Jamari's basis in the land? Feedback 0✔and the net effect on Vogel's AAA is a decrease 71,800✔ basis in the land. 179,500✔ basis in the of $ 71,800 X. Jamari

Exercise 22-19 (Algorithmic) (LO. 7) Vogel, Inc., an S corporation for five years, distributes a tract of land held as an investment to Jamari, its majority shareholder. The land was purchased for $71,800 ten years ago and is currently worth $179,500. If an amount is zero, enter, "0". a. As a result of the distribution, what is Vogel's recognized capital gain? How much is reported as a distribution to shareholders? Vogel recognizes a capital gain of $ a proportionate share of it passes through to the shareholders land. b. What is the net effect of the distribution on Vogel's AAA? There is a net decrease ✓of $ Vogel recognizes a loss $ would take a $ 107,700 ✓ which is reported on Schedule K, and ✓. Jamari would take a $ 71,800✔ on Vogel's AAA. c. Assume instead that the land had been purchased for $179,500 and was currently worth $71,800. How much would Vogel recognize as a loss? What would be the net effect on Vogel's AAA? What would be Jamari's basis in the land? Feedback 0✔and the net effect on Vogel's AAA is a decrease 71,800✔ basis in the land. 179,500✔ basis in the of $ 71,800 X. Jamari

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Why is this not 71,800? What's the real answer? 

Exercise 22-19 (Algorithmic) (LO. 7) Vogel, Inc., an S corporation for five years, distributes a tract of land held as an investment to Jamari, its majority shareholder. The land was purchased for $71,800 ten years ago and is currently worth $179,500. If an amount is zero, enter, "0". a. As a result of the distribution, what is Vogel's recognized capital gain? How much is reported as a distribution to shareholders? Vogel recognizes a capital gain ✔ of $ a proportionate share of it passes through to the shareholders land. b. What is the net effect of the distribution on Vogel's AAA? There is a net decrease ✔ of $ Vogel recognizes a loss $ would take a $ 107,700 ✓ which is reported on Schedule K, and ✔. Jamari would take a $ Feedback 71,800✔ on Vogel's AAA. c. Assume instead that the land had been purchased for $179,500 and was currently worth $71,800. How much would Vogel recognize as a loss? What would be the net effect on Vogel's AAA? What would be Jamari's basis in the land? o✓ and the net effect on Vogel's AAA is a decrease 71,800 ✓basis in the land. 179,500 ✓basis in the ✓of $ 71,800 X . Jamari ✓ Check My Work When an S corporation distributes property (instead of cash) to a shareholder, the effect on AAA and shareholder's basis must be determined.
Transcribed Image Text:Exercise 22-19 (Algorithmic) (LO. 7) Vogel, Inc., an S corporation for five years, distributes a tract of land held as an investment to Jamari, its majority shareholder. The land was purchased for $71,800 ten years ago and is currently worth $179,500. If an amount is zero, enter, "0". a. As a result of the distribution, what is Vogel's recognized capital gain? How much is reported as a distribution to shareholders? Vogel recognizes a capital gain ✔ of $ a proportionate share of it passes through to the shareholders land. b. What is the net effect of the distribution on Vogel's AAA? There is a net decrease ✔ of $ Vogel recognizes a loss $ would take a $ 107,700 ✓ which is reported on Schedule K, and ✔. Jamari would take a $ Feedback 71,800✔ on Vogel's AAA. c. Assume instead that the land had been purchased for $179,500 and was currently worth $71,800. How much would Vogel recognize as a loss? What would be the net effect on Vogel's AAA? What would be Jamari's basis in the land? o✓ and the net effect on Vogel's AAA is a decrease 71,800 ✓basis in the land. 179,500 ✓basis in the ✓of $ 71,800 X . Jamari ✓ Check My Work When an S corporation distributes property (instead of cash) to a shareholder, the effect on AAA and shareholder's basis must be determined.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
S Corporations
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS