A Corporation owns 20% of C Corporation. C has current earnings and profits of $40,000. C distributed property with a basis of $65,000 and a Fair Market Value of $35,000 to A Corporation. The property is subject to a liability of $70,000. Question: What are the tax consequences to A and to the C Corporation?

A Corporation owns 20% of C Corporation. C has current earnings and profits of $40,000. C distributed property with a basis of $65,000 and a Fair Market Value of $35,000 to A Corporation. The property is subject to a liability of $70,000. Question: What are the tax consequences to A and to the C Corporation?

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter5: Corporations: Earnings & Profits And Dividend Distributions

Section: Chapter Questions

Problem 42P

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