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Ben Corp distributes a parcel of land to its sole shareholder sera. The fair value of...

Ben Corp distributes a parcel of land to its sole shareholder sera. The fair value of the land is $30,000. The basis of the land to the corporation is $25,000. The land has a mortgage in the amount of $28,000 that is assumed by sera. What are the consequences to sera and to Ben Corporation. Assume that the earning and profits are $300,000.

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The given question is about tax consequences of both the parties on distribution of land. Refer below images for more detail solution.

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