distribution. What are the tax consequences to George because of the transaction? Question 11 options:
Lasco Corporation made a distribution of $50,000 to George Blair in partial liquidation of the company on December 31, 20X4. George owns 500 shares (50 percent) of Lasco. The distribution was in exchange for 250 shares of George's stock in the company. After the partial liquidation, George continued to own 50 percent of the remaining stock in Lasco. At the time of the distribution, the shares had a fair market value of $200 per share. George's income tax basis in the shares was $100 per share. Lasco had total E&P of $800,000 at the time of the distribution. What are the tax consequences to George because of the transaction?
Question 11 options:
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George has dividend income of $50,000 and a tax basis in his remaining shares of $100 per share. |
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George has |
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George has dividend income of $50,000 and a tax basis in his remaining shares of $200 per share. |
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George has capital gain of $25,000 and a tax basis in his remaining shares of $200 per share. |
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