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irinina [24]
4 years ago
11

Core Corporation reported current earnings and profits of $250,000. It distributed a buildingwith an adjusted basis to Core of $

170,000 and a fair market value of $230,000, to its soleshareholder. The building had a mortgage of $90,000, which the shareholder will assume. Whatis the amount of the dividend received by the shareholder?
A. $80,000
B. $140,000
C. $230,000
D. $250,000
Business
1 answer:
Svet_ta [14]4 years ago
8 0

Answer:

B. $140,000

Explanation:

An adjusted basis refers to the total cost of acquiring an asset. In include transportation, installing, commissions, and all other relevant fees. The fair market value represents the price an asset can fetch if sold in the market.  It is the amount that a company will receive if it were to dispose of an asset in the market.

Shareholders will be the fair market value adjusted for the mortgage balance.

=$ 230,000 - $ 90,000

=$140,000

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