Jane Receives a Nonliquidating Distribution of Land with a Fair

question 65

Short Answer

Jane receives a nonliquidating distribution of land with a fair market value of $30,000 and a basis of $18,000 from Strickland Corporation,an S corporation.Jane's basis in the stock is $46,000.What must Jane and Strickland report as income from the property distribution?
$\begin{array}{lll}&\text { Jane } & \text { Strickland } \\\text { a. } &\$-0- & \$-0- \\\text { b. } & \$ 12,000 & \$-0- \\\text { c. }& \$-0- & \$ 12,000 \\\text { d. } & \$ 12,000 & \$ 12,000\end{array}$

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term liabilities with its short-term assets.

Interest Expense

The cost incurred by an entity for borrowed funds over a period.

Times Interest Earned Ratio

A financial metric that measures a company's ability to meet its debt obligations based on current earnings before interest and taxes.

Cash Coverage Ratio

A fiscal indicator assessing a corporation's capability to fulfill its debt commitments using the cash flow generated from its operations.