Property Distributions

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Property Distributions

• Accy 312
• Jon Davis

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Todays Objectives

• Learn how property distributions impact
• Shareholder Income and basis
• Corporation Income and E P
• Learn tax concepts related to stock distributions
• Review Corporate Tax Concepts

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Property Distributions

• Shareholder
• Distribution valued at FMV less liabilities
  attached.
• Basis is FMV at distribution date
• Corporation
• Appreciation is taxed Loss is not deducted
• FMV is deemed to be greater of FMV or Liabilities
  transferred for purposes of gain
• EP reduced by greater of FMV or AB, less
  liability transferred and increased by gain
  recognized.
• Distributions cant create EP deficits.

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Stock Dividends

• If it doesnt change ownership interest, not
  taxable and no effect on E P.
• Basis of existing stock is reallocated
• Same stock-gt redivide basis
• Different stock -gt allocate based on fmv
• If it can change ownership interest (per
  conditions under Sec. 305), then taxed.
• Corp. treats same as property distribution
• SH basis is FMV on date of receipt.

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Sub C Jeopardy Rules

• Groups of 4 or 5.
• Lead off team chooses a number.
• I read question. Youve got 10 seconds.
• Responses in form of a question.
• 1 pt for correct answer.
• If wrong lose a point and other teams can ring
  in. 5 seconds to respond.
• Daily double choose points to wager.

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Subchapter C Jeopardy