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Finch Corporation (E & P of $400,000) distributed machinery ($10,000 adjusted basis, $150,000 fair market value) to its sole shareholder, Kathleen. The property is subject to a $50,000 mortgage, which Kathleen assumed. How much dividend income does Kathleen recognize as a result of the distribution and what is her basis in the machinery?
Interest Expense
The cost incurred by an entity for borrowed funds.
Debt/Equity Ratio
A financial metric showing the balance between the amount of equity provided by shareholders and the debt incurred to support a company's assets.
Cost of Borrowing
The total expense incurred by an entity for borrowing funds, including interest payments, fees, and other charges.
Book Value Per Share
A financial measure that represents a per share assessment of the minimum value of a company's equity.
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