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Cerulean Corporation has two equal shareholders, Eloise and Olivia

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Cerulean Corporation has two equal shareholders, Eloise and Olivia.;? Eloise acquired her Cerulean stock three years ago by transferring property worth $ 700,000, basis of $ 300,000, for 70 shares of the stock.;? Olivia acquired 70 shares in Cerulean Corporation two years ago by transferring property worth $ 660,000, basis of $ 110,000.;? Cerulean Corporation?s accumulated E & P as of January 1 of the current year is $ 350,000.;? On March 1 of the current year, the corporation distributed to Eloise property worth $ 120,000, basis to Cerulean of $ 50,000.;? It distributed cash of $ 220,000 to Olivia.;? On July 1 of the current year, Olivia sold her stock to Magnus for $ 820,000.;? On December 1 of the current year, Cerulean distributed cash of $ 90,000 each to Magnus and Eloise.;a) What are the tax issues?

 

Paper#76849 | Written in 18-Jul-2015

Price : $22
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