Fargo Corporation distributes property (basis of $1,370,400 and fair market value of $1,644,480) to a shareholder. Fargo Corporation has sufficient E & P for its distributions. What are the tax consequences of this distribution to Fargo? Fargo Corporation recognizes a gain The shareholder has dividend income of $ ✓of $ . The net decrease ✔to Fargo's E & P is $
Fargo Corporation distributes property (basis of $1,370,400 and fair market value of $1,644,480) to a shareholder. Fargo Corporation has sufficient E & P for its distributions. What are the tax consequences of this distribution to Fargo? Fargo Corporation recognizes a gain The shareholder has dividend income of $ ✓of $ . The net decrease ✔to Fargo's E & P is $
Chapter5: Corporations: Earnings & Profits And Dividend Distributions
Section: Chapter Questions
Problem 20CE
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Transcribed Image Text:Exercise 5-20 (Algorithmic) (LO. 5)
Fargo Corporation distributes property (basis of $1,370,400 and fair market value of $1,644,480) to a shareholder. Fargo Corporation has
sufficient E & P for its distributions.
What are the tax consequences of this distribution to Fargo?
Fargo Corporation recognizes a gain
The shareholder has dividend income of $
of $
The net decrease
to Fargo's E & P is $
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