Need help with an assignment on taxation of businesses
1 . X C orp o ra tio n h ad t w o i n div id ual s h are h o ld ers : A a n d B . A o w ned 1 00 s h are s a n d B o w ned 2 00 s h are s o f X s to ck . A ’s a d ju ste d b asis w as $ 1,0 00 p er s h are a n d B ’s a d ju ste d b asis w as $ 200 p er s h are . X h ad t h re e a sse ts : 1 ,2 a n d 3 . E a ch a sse t h ad a F M V o f $ 20,0 00. A sse t 1 h ad a n a d ju ste d b asis o f $ 10,0 00 a n d a sse ts 2 a n d 3 h ad a n a d ju ste d b asis o f $ 30,0 00. A sse t # 2 w as d is q ualif ie d p ro perty ( r e ce iv e d i n a 3 51 t ra n sa ctio n 2 y e ars a go ). I n t h e c u rre n t y e ar X l iq uid ate d p urs u an t t o a p la n o f l iq uid atio n. a . W hat i n co m e g a in o r l o ss w ould X , A a n d B r e co gn iz e i f X d is tr ib ute d a sse t 1 t o A a n d a sse ts 2 a n d 3 t o B i n t h e l iq uid atio n? i . X = i i. A = i ii. B = b . W hat i n co m e, g a in o r l o ss w ould X , A a n d B r e co gn iz e i f X d is tr ib ute d a sse t 3 t o A a n d a sse ts 1 a n d 2 t o B i n t h e l iq uid atio n? i . X = i i. A = i ii. B = c . W hat i n co m e, g a in o r l o ss w ould X , A a n d B r e co gn iz e i f X d is tr ib ute d t h e a sse ts p ro r a ta i n t h e l iq uid atio n?i . X = i i. A = i ii. B = 2 . A a n d B , t w o c a le n dar y e ar i n div id uals a n d c o rp o ra tio n C , w it h a J u ne 3 0 f is c a l y e ar e n d, f o rm ed P artn ers h ip P o n J a n uary 1 , 2 020. A c o ntr ib ute d $ 100,0 00 c a sh f o r a 2 0% i n te re st, B c o ntr ib ute d $ 100,0 00 c a sh f o r a 2 0% i n te re st a n d C c o ntr ib ute d $ 300,0 00 c a sh f o r a 6 0% i n te re st. P e arn ed $ 1,0 00 i n co m e p er m onth f o r t h e 2 020 c a le n dar y e ar a n d $ 2,0 00 i n co m e p er m onth f o r t h e 2 021 a n d 2 022 c a le n dar y e ars a n d $ 0 p er m onth f o r t h e 2 023 c a le n dar y e ar. a . W hat i n co m e, i f a n y, d o es A r e p o rt o n A ’s i . 2 020 i n co m e t a x r e tu rn _ ___________________ i i. 2 021 i n co m e t a x r e tu rn _ ___________________ i ii. 2 022 i n co m e t a x r e tu rn _ _____________________ i v . 2 023 i n co m e t a x r e tu rn _ ______________________ 3 . X C orp o ra tio n h ad t w o s h are h o ld ers : C c o rp o ra tio n a n d D c o rp o ra tio n. C o w ned 8 5 s h are s o f X a n d D o w ned 1 5 s h are s o f X . C ’s a d ju ste d b asis i s $ 1,0 00 p er s h are a n d D ’s a d ju ste d b asis i s $ 500 p er s h are . P u rs u an t t o a p la n o f l iq uid atio n, X d is tr ib ute d a n a sse t F M V $ 850,0 00 a d ju ste d b asis $ 900,0 00 t o C a n d a n a sse t F M V $ 200,0 00, a d ju ste d b asis $ 210,0 00 b ut s u bje ct t o a l ia b ilit y o f $ 50,0 00 t o D . a . W hat i n co m e, g a in o r l o ss, i f a n y, d o es C r e co gn iz e a s a r e su lt o f t h e l iq uid atio n? b . W hat i n co m e, g a in o r l o ss, i f a n y, d o es D r e co gn iz e a s a r e su lt o f t h e l iq uid atio n? c . W hat i n co m e, g a in o r l o ss, i f a n y d o es X r e co gn iz e a s a r e su lt o f t h e l iq uid atio n?
