Foley Corporation (a C corporation subject to a 21% income tax rate) has 2 shareholders: Wang Corporation (a C corporation which owns 20% of the stock) and Anthony (a single individual who owns 80% of the stock). Anthony's basis for his stock is $80,000 and Wang Corporation's basis for its stock is $20,000. Foley Corp. has $226,000 current E&P and $45,000 accumulated E&P before adjusting for the following. During the year Foley Corp. distributed property (with a fair market value of $240,000 and adjusted basis of $125,000) to Anthony On the same day, Foley Corp. also made a distribution to Wang Corporation of property (with a fair market value of $95,000 and adjusted basis of $50,000). Wang Corporation also assumed a $35,000 liability on this property. These were the only distributions this year by Foley Corporation. How much total gain does Foley Corporation recognize as a result of the distributions? OA. Zero OB. $160,000 OC. $126,400 OD. $125,000

Foley Corporation (a C corporation subject to a 21% income tax rate) has 2 shareholders: Wang Corporation (a C corporation which owns 20% of the stock) and Anthony (a single individual who owns 80% of the stock). Anthony's basis for his stock is $80,000 and Wang Corporation's basis for its stock is $20,000. Foley Corp. has $226,000 current E&P and $45,000 accumulated E&P before adjusting for the following. During the year Foley Corp. distributed property (with a fair market value of $240,000 and adjusted basis of $125,000) to Anthony On the same day, Foley Corp. also made a distribution to Wang Corporation of property (with a fair market value of $95,000 and adjusted basis of $50,000). Wang Corporation also assumed a $35,000 liability on this property. These were the only distributions this year by Foley Corporation. How much total gain does Foley Corporation recognize as a result of the distributions? OA. Zero OB. $160,000 OC. $126,400 OD. $125,000

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter18: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 16P

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