A Business Entity Has Appreciated Land Basis of $50,000 and Fair

question 75

Essay

A business entity has appreciated land basis of $50,000 and fair market value of $75,000) which it is going to distribute to Craig, one of its owners. The entity has earned substantial profits during its 15 years of operations and has reinvested most of them in the business. What are the tax consequences of the distribution to the business entity and to Craig if the business entity is an):
a. C corporation?
b. S corporation?
c. Partnership?

---

Definitions:

Holistic

An approach that considers the whole system, including physical, mental, social, and spiritual aspects, rather than focusing on individual parts.

Mechanical

Pertaining to or involving machines or mechanical forces, often related to the physical aspects of objects and processes.

Rationalist

A person who emphasizes reasoning, logic, and knowledge derived from intellectual analysis and deduction.

Innately Attractive

Describes something that is naturally appealing or attractive without the need for learning or acquisition.