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Alice, the sole shareholder of QLP, decided that she would purchase a building and then lease it to QLP. She leased the building to QLP for $3,900 per month. However, the IRS determined that the fair market value of the lease payment should be only $3,315 per month. How would the lease payment be treated with respect to both Alice and QLP?

Alice QLP

OPTIONS TO CHOOSE FROM FOR QLP

OPTIONS TO CHOOSE FROM FOR ALICE:

$3,315 of ordinary income and $585 of a taxable dividend. $3,315 of taxable dividend and $585 of a ordinary income. $3,900 of

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Solution Alice, the sole share holder of QLP, decided that she would purchase a building and then lease it to GLp. she leased

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