Digger Corporation Has $50,000 of Current and Accumulated E&P

question 43

Essay

Digger Corporation has $50,000 of current and accumulated E&P. On March 1, Digger distributes land with a $30,000 FMV and a $17,500 adjusted basis to Dave, its sole shareholder. The land is subject to a $5,000 liability which Dave assumes.
a)What are the amount and character of the distribution?
b)What is Dave's basis in the property?
c)When does his holding period for the property begin?

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Definitions:

Sales Orientation

A business approach that prioritizes the selling of products and services over understanding the needs and preferences of the consumer, focusing on sales volume.

Marketing Concept

A philosophy that firms should analyze the needs of their customers and then make decisions to satisfy those needs, better than the competition.

Market Orientation

A business approach centered around understanding and meeting the needs and wants of customers.

Managerial Philosophies

Sets of beliefs and principles that guide the decision-making and leadership styles of managers.