42) & 43) Apple Corp distributes a piece of equipment to Sarah, its 100% shareholder....
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Accounting
42) & 43) Apple Corp distributes a piece of equipment to Sarah, its 100% shareholder. The property has a FMV of $35,000 and an adjusted basis of $15,000
42) Assuming there is sufficient E & P to treat this transaction as a dividend to Sarah, the effect of this transaction to the E & P of Apple is
a. an increase of $20,000
b. a decrease of $15,000
c. a decrease of $35,000
d. a decrease of $15,000
43) Sarah has dividend income of
a. $10,000
b. $15,000
c. $20,000
d. $35,000
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