Anchor Inc. is an S corporation wholly owned by Ron Burgundy. At the beginning of...
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Accounting
Anchor Inc. is an S corporation wholly owned by Ron Burgundy. At the beginning of the year, Ron's tax basis in his Anchor stock was $90,000. The S corporation reported net ordinary income this year of $60,000. During the year, it distributed Code Sec. 1231 property with a tax basis of $188,000 and a fair market value of $225,000 to Ron.
a. How will the distribution affect both Ron and Anchor Inc. for tax purposes?
b. What will be Ron's tax basis in the property received in the distribution? c. What will be Ron's remaining tax basis in his Anchor shares?
c. What will be Ron's remaining tax basis in his Anchor shares?
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