The sole shareholder of ABC Co. purchased the shares of the company in 2016 for $25,000 and has recently valued the shares at $150,000. In preparation to sell the company to an arm's - length party, the shareholder decided not to issue the usual annual dividend of $20,000. What type of tax planning is the shareholder engaging in?
The sole shareholder of ABC Co. purchased the shares of the company in 2016 for $25,000 and has recently valued the shares at $150,000. In preparation to sell the company to an arm's - length party, the shareholder decided not to issue the usual annual dividend of $20,000. What type of tax planning is the shareholder engaging in?
Chapter7: Deductions And Losses: Certain Business Expenses And Losses
Section: Chapter Questions
Problem 21CE
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Transcribed Image Text:The sole shareholder of ABC Co. purchased the shares of the company in 2016 for $25,000 and has recently
valued the shares at $150,000. In preparation to sell the company to an arm's - length party, the
shareholder decided not to issue the usual annual dividend of $20,000. What type of tax planning is the
shareholder engaging in?
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