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A Business Distributes Land to One of Its Owners

question 80

Essay

A business distributes land to one of its owners.The business purchased the land a few years ago for $15,000,but it is now worth $35,000.Compare the treatment of this distribution when made by a partnership as opposed to an S corporation.Consider the impact on the business and the partner/shareholder and the determination of basis in the property.


Definitions:

Curvilinear

Describes a relationship between two variables that is graphed as a curved line.

Compounded Interest

This refers to the calculation of interest on the original principal amount as well as on the interest that has accrued in earlier times, applicable to both deposits and loans.

Rate Of Return

The earning or losing of funds on an investment throughout a defined timeframe, detailed as a percentage of the original amount invested.

Profits

The financial gain made in a transaction or operation, calculated as the difference between revenue and costs.

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