How much income must he report for tax purposes

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Question - On September 30, Silver Corporation, a calendar year taxpayer, sold a parcel of land (basis of $400,000) for a $1 million note. The note is payable in five installments, with the first payment due next year. Because Silver did not elect out of the installment method, none of the $600,000 gain is taxed this year. Silver Corporation had a $300,000 deficit in accumulated E&P at the beginning of the year. Before considering the effect of the land sale, Silver had a deficit in current E&P of $50,000.

Sam, the sole shareholder of Silver, has a basis of $200,000 in his stock. If silver distributes $900,000 to Sam on December 31, how much income must he report for tax purposes?

Reference no: EM131978014

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