Briefly Describe the Reason a Corporation Might Distribute a Property

question 39

Essay

Briefly describe the reason a corporation might distribute a property dividend to a shareholder in lieu of a cash distribution. Describe the tax effects of the property distribution on the shareholder and on the corporation.

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Definitions:

Identified

Singled out or recognized from among others.

Existing

Currently present or in existence.

Interest

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, paid over a specified period.

Entrusts

To give someone the responsibility to take care of something or act on one's behalf.