Pop Corp owns 200 shares of stock in Small Corp, which represents 35% in Small Corp. The value of the 200 shares of stock is $500. Pop Corp’s basis in the 200 shares of stock $100. At the end of 2021 when Small Corp had earnings and profits of $300, Small Corp redeemed all of Pop Corp’s stock for $500 cash. What is the amount of gain that Small Corp is required to recognize?
Pop Corp owns 200 shares of stock in Small Corp, which represents 35% in Small Corp. The value of the 200 shares of stock is $500. Pop Corp’s basis in the 200 shares of stock $100. At the end of 2021 when Small Corp had earnings and profits of $300, Small Corp redeemed all of Pop Corp’s stock for $500 cash. What is the amount of gain that Small Corp is required to recognize?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter6: Losses And Loss Limitations
Section: Chapter Questions
Problem 3CE
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Pop Corp owns 200 shares of stock in Small Corp, which represents 35% in Small Corp. The value of the 200 shares of stock is $500. Pop Corp’s basis in the 200 shares of stock $100. At the end of 2021 when Small Corp had earnings and profits of $300, Small Corp redeemed all of Pop Corp’s stock for $500 cash.
What is the amount of gain that Small Corp is required to recognize?
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