Digger Corporation Has $50,000 of Current and Accumulated E&P

question 93

Essay

Digger Corporation has $50,000 of current and accumulated E&P. On March 1, Digger distributes land with a $3 FMV and a $17,500 adjusted basis to Dave, its sole shareholder. The land is subject to a $5,000 liability which Dav assumes.
a) What are the amount and character of the distribution?
b) What is Dave's basis in the property?
c) When does his holding period for the property begin?

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Definitions:

Unhappy Marriage

A state of marriage where partners experience persistent dissatisfaction and conflict, often leading to emotional distress.

Heterosexual Relationships

Relationships involving two people of opposite genders.

Homosexual Relationships

Romantic and sexual unions between individuals of the same sex.

Satisfaction

Refers to the feeling of fulfillment or contentment arising from meeting one’s desires, expectations, or needs.