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16 February, 07:22

Tour Corp., which had earnings and profits of $400,000, made a nonliquidating distribution of property to its shareholders during the current year. This property, which had an adjusted basis of $30,000 and a fair market value of $20,000 at date of distribution, did not constitute assets used in the active conduct of Tour's business. How much loss did Tour recognize on this distribution?

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  1. 16 February, 08:28
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    Adjusted basis less Market value=$30000-$20000=$10000

    Explanation:

    In actual terms the property was worth $30000 but commanded only $20000 in the market, invariably $10000 is lost
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