Detail the tax consequences to pa corporation

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PA Corporation, an S corporation, has two equal shareholders, P and A. Prior to the end of the current year, PA decides to liquidate and sell its three remaining assets and distribute the cash received to P and A. Asset 1 has a basis of $10,000 and is sold for $6,000. Asset 2 has a basis of $4,000 and is sold for $12,000. Asset 3 has a basis of $9,000 and is sold for $10,000.

Shareholder P has a basis of $4,000 in her shares, and A has a basis of $20,000. The corporation has a net loss (excluding the sales of the assets) of $2,500. Detail the tax consequences to PA Corporation and its two shareholders on the liquidation of the corporation.

Reference no: EM13539880

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