Discuss what is her basis in the property received

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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.

A. What gain, if any, does Apricot recognize on the distribution. What is Apricot's accumulated E & P at the start of the following year?

B. What is the amount of Ellie's dividend income on the distribution? What is her basis in the property received?

Reference no: EM131757756

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