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28 February, 17:19

Shareholder of c corporation receiving property distribution must recognize dividend income equal to the fair market value of the distributed property if the distribution corporation has sufficient earning and profit. True / False.

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  1. 28 February, 20:59
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    True

    Explanation:

    The dividends to be recognized are always for the amount they are given in cash, but in case of property dividends, the dividends are to be recognized at fair value of the property distributed.

    This is in accordance with GAAP.

    There is no recognition based on book value or carrying value of the property distributed as do not represent the net exchange value of the property.

    Therefore, the statement is TRUE
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