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MED CORPORATE OPERATIONS #20 A corporation distributes property which has a basis of $ 76 thousand...

MED CORPORATE OPERATIONS #20

A corporation distributes property which has a basis of $ 76 thousand and a fair market value of $ 39 thousand to its sole shareholder. What is the corporation's gain or loss in thousands on the distribution of this property, if any?

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Answer #1

Solution:

Definition of Corporation GAIN:

Corporation gain is a rise in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold. A capital gain may be short-term (one year or less) or long-term (more than one year) and must be claimed on income taxes.

Property distributes by MED CORPORATE OPERATIONS

GIven: Basic value =$76,000

Fair market value = $39,000

*Corporation recognized Gain Would be = $76,000-$39,000

= $37,000

Therefore Corporation Gain = $37,000.



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