Sole proprietorship to blue corporation

Assignment Help Accounting Basics

Reference no: EM13158078

Five years ago, Eleanor transferred property she had used in her sole proprietorship to Blue Corporation for 1,000 shares of Blue Corporation in a transaction that qualified under § 351. The assets had a tax basis to her of $300,000 and a fair market value of $450,000 on the date of the transfer. In the current year, Blue Corporation (E & P of $600,000) redeems 200 shares from Eleanor for $190,000 in a transaction that qualifies for sale or exchange treatment. With respect to redemption, Eleanor will have a:

a. $130,000 dividend

b. $190,000 dividend

c. $130,000 capital gain

d. $190,000 capital gain

e. None of the above

Reference no: EM13158078

Questions Cloud

Foster critical thinking : What types of questions can you ask at work to foster critical thinking? Are they different than the types of questions you would ask at school or home? Why?

Qualifying stock redemption problem : Yellow Corporation transfers land (basis of $210,000, fair market value of $300,000) to Joe, a shareholder, to carry out a qualifying stock redemption. The land is distributed subject to a $320,000 liability. With respect to the redemption:

Does biological evolution have any bearing on moral : Does biological evolution have any bearing on moral or ethical aspects of human life? Should biological evolution inform our morality? If biology has no role in discussions of ethics and morality, what should be the basis for these discussions?

What is electromechanical safety in angiography : What is electromechanical safety in Angiography? Is it considered in quality control of the system?

Sole proprietorship to blue corporation : Five years ago, Eleanor transferred property she had used in her sole proprietorship to Blue Corporation for 1,000 shares of Blue Corporation in a transaction that qualified under § 351.

What is precipitating cause of particular type of arthritis : What is the precipitating cause of this particular type of arthritis?

Produce consolidated financial statements : Advise Polaris Ltd whether it is required to produce consolidated financial statements (CFS). Consider the levels of control and the members' rights in your answer.

Which category of organisms is responsible for fixing : Which category of organisms is responsible for fixing the world's supply of carbon?

Solutions to problems and issues : Why do you think it is difficult for you to criticize your own ideas and solutions to problems and issues? Why is it important to criticize your own ideas?

User Account

All Pages