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Property Distributions: Effective on noncorporate shareholders. During the year,WRK Corp.distributed the items listed below to...

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Accounting

Property Distributions: Effective on noncorporate shareholders. During the year,WRK Corp.distributed the items listed below to its sole shareholders,F , an individual. WRK has substancial E&P. For each of the distributed items answer the follwing.

1. What is the effect of the distribution on the shareholders taxable income?

2. What is the shareholders basis of the property received?

a. A small acreage of land used in the corporations farming business was distributed,having a value of $70,000(basis $20,000).

b. Same as (a) , expect the acreage was subject to a mortgage of$30,000, which F assumed.

c. A warehouse worth $60,000 (adjusted basis $90,000). Straight-line depreciation of $10,000 had been deducted since the property's acquisition.

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