During the Year, P&B Construction Corp

question 20

Multiple Choice

During the year, P&B Construction Corp.distributed a crane used in its business to S, who owns 100 percent of the stock.The crane was worth $10,000 and had a basis of $19,000.The corporation also distributed land worth $70,000 (basis $40,000) .Assuming P&B has substantial earnings and profits, the corporation will report

• A)No gain or loss
• B)$30,000 gain
• C)$9,000 loss
• D)$21,000 gain
• E)None of the above

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Definitions:

Dividend

A portion of a company's earnings distributed to shareholders, typically in the form of cash or additional stock.

Rate of Yield

The return on an investment expressed as a percentage, which can be calculated based on income received and the original or current value of the investment.

Differential Rate

A differential rate refers to a pricing strategy where the rate charged varies based on certain conditions or parameters, often seen in shipping or finance sectors.

Commission Charges

Fees paid to agents or brokers for their services, typically a percentage of the transaction value.