Pym, Inc., which had earnings and profits of $100,000, distributed land to Kile Corporation, a shareholder. Pym's adjusted basis for this land was $3,000. The land had a fair market value of $12,000 and was subject to a mortgage liability or $5,000, which was assumed by Kile Corporation. The dividend was declared and paid during March of the current year.
How much of the distribution would be reportable by Kile as a dividend, before the dividends received deduction?
a. $0
b. $3,000
c. $7,000
d. $12,000
Answer: C
Tax
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- Income in respect of a cash-basis decedent
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