Solution-What are the tax consequences of the distributions

What are the tax consequences of the distributions

Assignment Help Accounting Basics

Reference no: EM132662481

Problem - The stock in Ivory Corporation is owned by Gold Corporation (80%) and Imelda (20%). Gold Corporation purchased its shares in Ivory nine years ago at a cost of $650,000, and Imelda purchased her shares in Ivory four years ago at a cost of $175,000. Ivory Corporation has the following assets that are distributed in complete liquidation:

	Adjusted Basis	Fair Market Value
Cash	$600,000	$600,000
Inventory	80,000	200,000
Equipment	350,000	200,000

Required -

a. Assume that Ivory Corporation distributes the cash and inventory to Gold Corporation and the equipment to Imelda. What are the tax consequences of the distributions to Ivory Corporation, to Gold Corporation, and to Imelda?

b. Assume that Ivory Corporation distributes the cash and equipment to Gold Corporation and the inventory to Imelda. What are the tax consequences of the distributions to Ivory Corporation, to Gold Corporation, and to Imelda?

Reference no: EM132662481

Questions Cloud

Explain the trade-offs banks face : Why banks try to seek a balance between short term and long term loans in their loan portfolio. What are the advantages and disadvantages of offering short term

What are the tax consequences of the liquidation to Magenta : Assuming that the § 338 election is not made, what are the tax consequences of the liquidation to Magenta, Fuchsia, and Marta

Review the company mission and vision statements : Describe elements of your company's Mission and Vision statements that reflect the organization's commitment to the greater social good

Differences between action research and traditional research : Identify similarities and differences between action research and traditional research. Explain why businesses might choose to implement an action research.

What are the tax consequences of the distributions : Assume that Ivory Corporation distributes the cash and inventory to Gold Corporation and the equipment to Imelda. What are the tax consequences of distributions

How would you describe an eportfolio : What are signature assignments and how do you select the best one to include in your portfolio? Will you include videos and pictures?

Identify an organizational problem to solve within workplace : The purpose of this assignment is to identify an organizational problem to solve within your current workplace or industry and use an affinity diagram.

Explain the impact have had on financial markets : Financial innovations can have dramatic effects. Explain how and why NOW accounts came about and the impact they have had on financial markets.

Explain the impact risk management : Explain the impact Risk Management has on patient outcome, regulatory compliance, worker safety, and financial stability.

User Account

All Pages

What are the tax consequences of the distributions

Reference no: EM132662481

Reference no: EM132662481

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT