A business entity has appreciated land (basis of $50,000 and fair market value of $75,000) which it is going to distribute to Craig, one of its owners. The entity has earned substantial profits during its 15 years of operations and has reinvested most of them in the business. What are the tax consequences of the distribution to the business entity and to Craig if the business entity is a(n):
Definitions:
Fetus
A developing human from roughly eight weeks after conception to birth.
Genome
The complete instructions for making an organism, consisting of all the genetic material in that organism’s chromosomes.
Embryo
An early stage of development in multicellular organisms, in humans, it refers to the period from fertilization until about the eighth week of gestation.
Zygote
The earliest cellular stage in embryonic development, resulting from the fertilization of an egg by a sperm.
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