The sole shareholder of ABC Co. purchased the shares of the company in 2016 for $25,000 and has recently valued the shares at $150,000. In preparation to sell the company to an arm's - length party, the shareholder decided not to issue the usual annual dividend of $20,000. What type of tax planning is the shareholder engaging in?

The sole shareholder of ABC Co. purchased the shares of the company in 2016 for $25,000 and has recently valued the shares at $150,000. In preparation to sell the company to an arm's - length party, the shareholder decided not to issue the usual annual dividend of $20,000. What type of tax planning is the shareholder engaging in?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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