Problem 5-39 (LO. 1, 5) Apricot Corporation distributes property ($125,000 basis and $150,000 fair market value) to its sole shareholder, Ellie. The property is subject to a liability of $200,000, which Ellie assumes. Apricot has E & P of $325,000 prior to the distribution. If an amount is zero, enter "0". a. What gain or loss does Apricot recognize on the distribution? What is Apricot's accumulated E & P at the start of the following year? Apricot has a of $ on the distribution and new E & P after the distribution of $ b. What is the amount of Ellie's dividend income on the distribution? What is her basis in the property received? Ellie has dividend income of $ and has a basis in the property of $
Problem 5-39 (LO. 1, 5) Apricot Corporation distributes property ($125,000 basis and $150,000 fair market value) to its sole shareholder, Ellie. The property is subject to a liability of $200,000, which Ellie assumes. Apricot has E & P of $325,000 prior to the distribution. If an amount is zero, enter "0". a. What gain or loss does Apricot recognize on the distribution? What is Apricot's accumulated E & P at the start of the following year? Apricot has a of $ on the distribution and new E & P after the distribution of $ b. What is the amount of Ellie's dividend income on the distribution? What is her basis in the property received? Ellie has dividend income of $ and has a basis in the property of $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 5-39 (LO. 1, 5)
Apricot Corporation distributes property ($125,000 basis and $150,000 fair market value) to its sole shareholder, Ellie. The property is
subject to a liability of $200,000, which Ellie assumes. Apricot has E & P of $325,000 prior to the distribution.
If an amount is zero, enter "0".
a. What gain or loss does Apricot recognize on the distribution? What is Apricot's accumulated E & P at the start of the following year?
Apricot has a
of $
on the distribution and new E & P after the distribution of $
b. What is the amount of Ellie's dividend income on the distribution? What is her basis in the property received?
Ellie has dividend income of $
and has a basis in the property of $
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