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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?
Journal
A chronological record of all financial transactions, used to transfer information to the general ledger in the accounting process.
Journal Entries
Records of financial transactions in the accounting system, ensuring that the debit and credit balance.
Debit
A financial record that leads to a rise in assets or a reduction in liabilities on the balance sheet of a company.
Credit Accounts
Accounts within financial accounting that are increased with a credit entry, carrying a balance that could be beneficial (revenue, gains) or detrimental (liabilities, expenses).
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