1. Ciabatta Corporation made a cash distribution on December 31 of $90,000 each to Giselle (owns 50%) and French Corp (owns 50%). Giselle's stock basis in Ciabatta is $50,000 and French Corp's stock basis in Ciabatta is $15,000. What is the tax consequence to both Giselle and French Corp on the distribution in each independent scenario? a. Ciabatta has positive CEP of $66,000 and positive AEP of $36,000 b. Ciabatta has negative CEP of $10,000 and positive AEP of $96,000 c. Ciabatta has positive CEP of $44,000 and negative AEP of $10,000

1. Ciabatta Corporation made a cash distribution on December 31 of $90,000 each to Giselle (owns 50%) and French Corp (owns 50%). Giselle's stock basis in Ciabatta is $50,000 and French Corp's stock basis in Ciabatta is $15,000. What is the tax consequence to both Giselle and French Corp on the distribution in each independent scenario? a. Ciabatta has positive CEP of $66,000 and positive AEP of $36,000 b. Ciabatta has negative CEP of $10,000 and positive AEP of $96,000 c. Ciabatta has positive CEP of $44,000 and negative AEP of $10,000

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter15: Choice Of Business Entity—other Considerations

Section: Chapter Questions

Problem 81P

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