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2. Amy owns 25% of ABC Corporation stock. She currently

Question : 2. Amy owns 25% of ABC Corporation stock. She currently : 2437

2. Amy owns 25% of ABC Corporation stock. She currently has $200,000 adjusted basis. She is a cash basis accounting taxpayer. ABC has indicated that they will issue a year-end, $270,000 liquidating distribution to Amy for year 2016. This distribution will be paid on January 3, 2017.

a) What is the amount of gain or loss that Amy will report in 2016?

b) What about in 2017? Please explain in detail or provide calculations.

c) How would your answer differ if Amy was an accrual method accounting taxpayer.

 

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