TAX 9866 Lecture Notes - Lecture 26: Market Risk, Preferred Stock
Document Summary
If a corporation distributes appreciated property with a fair market value in excess of its adjusted tax basis, the corporation will recognize gain as if it has sold the property immediately before the distribution. The amount realized is deemed to be the fair market value of the property at the time of the distribution. The prohibition on losses in 311(a)(2) still applies. Effects of non liquidating distributions on earnings & profits so distributed under irc section 312(a)(3). Gain recognized as a result of 311(b) increases current e&p. E&p is generally reduced after the distribution by the adjusted basis of the property. Consequences of non liquidating distributions to the shareholder or to which the property is subject. Amount of distribution is the fmv of property received less any liabilities assumed. Amount is taxed under the principles of irc section 301(c) dividend, return of.
