On February 19, 2015, Reggie and Mick form IClude Corporation as equal 50/50 shareholders with the following investment, for which each received 1,000 shares of IClude Corporation stock: Cash Land (basis $200,000; fair market value $500,000) From Reggie $500,000 From Mick $500,000 What are the federal income tax consequences if, on May 1, 2015, IClude Corporation distributes 10 shares of IClude Corporation preferred stock to each of Reggie and Mick?

On February 19, 2015, Reggie and Mick form IClude Corporation as equal 50/50 shareholders with the following investment, for which each received 1,000 shares of IClude Corporation stock: Cash Land (basis $200,000; fair market value $500,000) From Reggie $500,000 From Mick $500,000 What are the federal income tax consequences if, on May 1, 2015, IClude Corporation distributes 10 shares of IClude Corporation preferred stock to each of Reggie and Mick?

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 26P

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