Under a plan of complete liquidation, Adams Corporation distributes land (FMV $400,000; A/B $300,000) to John, a 25% shareholder.  John has a $200,000 basis in his Adams Corporation stock.  The land is inventory in the hands of Adams Corporation.  Adams Corporation must recognize

Reagan Corporation (a C corporation) was formed in 2022 and is a fiscal-year taxpayer with a June 30 year-end. Reagan wants to make an S election for its tax year beginning in 2025. The election must be made by

George owns a 10% interest in the Bush Partnership from January 1 through March 31 (the 91st day of the tax year) of 2025. On April 1, 2025 George buys an additional 10% interest in the partnership. On July 1, 2025 (the 182nd day of the year) George buys an additional 20% interest in the partnership. Bush Partnership’s ordinary income is $156,800 and it is earned evenly throughout the year. George’s distributive share of the ordinary income is

Thomas acquired a 25% interest in Jefferson Partnership by contributing land having an adjusted basis of $16,000 and a fair market value of $50,000.  The land was subject to a $24,000 mortgage, which was assumed by Jefferson Partnership.  No other liabilities existed at the time of the contribution.  What was Thomas’ basis in Jefferson Partnership?

George has a 30% interest in the Washington Partnership computed after taking into account his guaranteed payment of $40,000. In 2025, Washington Partnership reports ordinary income of $30,000 and capital gains of $60,000 before taking into account George’s guaranteed payment. What is the amount and character of all income or loss that George must report as a result of partnership activities?

Franklin owns a 25% interest in Pierce Partnership. On January 1, 2025 Franklin had a basis in his partnership interest of $5,000. For 2025 Pierce Partnership reported the following items: Ordinary business income – $100,000; §1231 gain – $15,000; Charitable contributions – $25,000; Tax-exempt income – 3,000; Pierce Partnership bank loan – $12,000. What is Franklin’s outside basis after adjustment for his share of these items? 

Millard transfers an asset having a FMV of $200,000 and an adjusted basis of $150,000 to Fillmore Corporation in a §351 transaction. Millard receives in exchange Fillmore common stock having an FMV of $175,000 and White House Corporation common stock (a capital asset) having a FMV of $25,000 and a basis of $10,000 to Fillmore Corporation. Fillmore Corporation must recognize

At the end of 2025, Johnson Inc. (an S corporation) liquidates by distributing long-term capital gain property ($40,000FMV, $25,000A/B) to each of its four equal shareholders ($160,000FMV, $100,000A/B). At the time of the distribution, Andrew has a basis of $15,000 in his Johnson Inc. stock. How much total gain or loss does Andrew recognize on the distribution?

Franklin is a 50% partner in the Pierce Partnership and has an outside basis of $26,000 at the end of the year prior to any distributions. On December 31, Franklin receives a proportionate operating distribution of $16,000 cash and a parcel of land with a $24,000 fair value and an $18,000 basis to Pierce. What is Franklin’s basis in the distributed property?

William Henry has a 50% interest in Harrison Partnership. The basis for his partnership interest is $50,000. The partners share the economic risk of loss from liabilities in the same way they share partnership income and losses. William Henry receives a distribution of land that has an FMV of $40,000 and an adjusted basis of $30,000. The land is subject to a $25,000 liability, which William Henry assumes. His basis in the partnership interest following the land distribution is