During 2019, CDE Corporation (An S Corporation Since Its Inception

question 75

Essay

During 2019, CDE Corporation (an S corporation since its inception in 2017)liquidates this year by distributing a parcel of land to its sole shareholder, Clark.The fair market value of the land at the time of the distribution was $100,000 and CDE's tax basis in the property was $130,000.Before considering the effects of the distribution, Clark's basis in his CDE stock was $40,000.What amount of loss, if any, does CDE recognize on the distribution? What amount of income, if any, does Clark recognize on the distribution and what is his basis in the land?

---

Definitions:

Mandatory Recalls

Orders issued by a government agency or body mandating the removal of defective or unsafe products from the market.

First Amendment Protection

Refers to the safeguards provided by the First Amendment to the U.S. Constitution, which includes freedoms of speech, religion, press, assembly, and the right to petition the government.

Public Employee

An individual employed by government entities at various levels, including federal, state, and local, responsible for executing the duties of their respective offices.

Political Topics

Subjects or issues related to governmental policies, actions, and systems that affect the governance and regulation of a society.