Carleton Corporation distributes investment securities to each of its individual shareholders. The total basis of these securities is $60,000 and the total fair market value of them is $90,000. However, these securities were used as collateral for a loan to the corporation and $30,000 of that loan still encumbers the securities and is assumed by the shareholders. How much is the dividend income to the shareholders?

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter22: S Corporations
Section: Chapter Questions
Problem 36P
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Carleton Corporation distributes investment securities to each of its individual shareholders. The total basis of these securities is $60,000 and the total fair market value of them is $90,000. However, these securities were used as collateral for a loan to the corporation and $30,000 of that loan still encumbers the securities and is assumed by the shareholders. How much is the dividend income to the shareholders?

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