IS utA D wn
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Peter and his wife, Alice, own all the stock
of Galleon Corporation. Galleon made its S
election 12 years ago. Peter and Alice sold
one-half their Galleon stock to a
partnership owned by Rob and Susan (not
husband and wife) at the close of business
on December 31 of the current year for a
$75,000 profit.
What are the tax consequences of the sale
transaction for Peter and Alice? For the
corporation?
As Peter and Alice's CPA, do you have any
advice for them if all parties would like the S
election to continue?
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