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Corporation K distributed land used in its business to its…

Corporation K distributed land used...
Corporation K distributed land used in its business to its shareholders in redemption of some of its outstanding stock. At the time of the distribution, the land had an adjusted basis to K of $200,000 and a fair market value of $500,000. Corporation K must recognize how much gain?$0
$60,000 reduction
$300,000 reduction
$40,000 reduction
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Answered in 2 minutes by:
3/21/2018
Carter McBride
Carter McBride, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,055
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Stock redemptions are treated like the property is sold at FMV to shareholders.

Sales Price $500,000 less $200,000 basis = $300,000 gain.

Carter McBride
Carter McBride, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,055
Experience: Adjunct Professor
Verified
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