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:

Socialization

The process by which individuals learn and adopt the norms, values, and behaviors appropriate to their society.

Sociologically

Pertaining to or involving the study of the development, structure, and functioning of human society and the behavior of individual people and groups within it.

Significant Others

Individuals who have a profound influence on one's self-concept and social identity, typically through close personal relationships.

Agents of Socialization

These are individuals, groups, and institutions that shape an individual's social development and norms, including family, peers, schools, and media.