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Business, 30.05.2020 18:01 jennamae9826

Tornado, an S corporation, has no earnings and profits. In 2019, Tornado distributed property with a fair market value of $32,500 and an adjusted basis of $26,000 to Dorothy, its sole shareholder. After Dorothy’s share of any corporate gain or loss was recognized, her adjusted basis in Tornado’s stock at year end was $25,000. How should Dorothy handle the distribution?

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Tornado, an S corporation, has no earnings and profits. In 2019, Tornado distributed property with a...
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