Reference no: EM132899441
Question - Rodney owns 100% of the stock of Three points Corp. Three Points has $100,000 of E&P. Distributions were made as follows:
1. Land with FMW of $5,000 and a cost basis of $1,000.
2. Same as 1 above except the land was subject to a mortgage of $3,000.
3. Equipment with a FMW of $3,000 and a cost of $8,000 and depreciation claimed of $1,000.
Required - For each distribution calculate the following:
-The dollar effect of the distribution on the shareholder's taxable income.
-The shareholder's basis for the property received.
-The dollar effect of the distribution on the Three Point Corp.'s taxable income
-What is the dollar amount of the Three Point Corp's E&P after the distribution?
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