Lake Corporation Distributes a Building Used in Its Business to Sandy

question 25

Essay

Lake Corporation distributes a building used in its business to Sandy in exchange for all of her Lake stock. Sandy's basis in her stock is $30,000 and the property she receives has a $90,000 FMV. As part of the distribution, Sandy assumes a liability associated with the property of $65,000. The property's basis prior to the liquidating distribution was $25,000. What are the tax consequences of the distribution to Sandy? To Lake Corporation?

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Definitions:

Extra Hours

Additional hours worked beyond the usual or scheduled working time, often eligible for overtime compensation.

Workflow

The sequence of processes through which a piece of work passes from initiation to completion.

Productivity

The effectiveness of productive effort, especially in industry, measured in terms of the rate of output per unit of input.