What is Tom basis in his stock following this distribution

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Question - At the end of 2015 (before the Dec. 31 distribution), Tom has a stock basis of $50,000. XYZ Corporation has a deficit in current E&P of $(2,000) and a deficit in accumulated E&P of ($80,000).

On December 31, 2020, the corporation distributes another parcel of land with a FMV of $80,000 and an adjusted basis of $35,000. If Tom is in the 37% tax bracket and that he does not have any capital transactions; then,

Required -

1. How much tax (if any) does Tom owe from the distribution of this equipment?

2. What is Tom's basis in his stock following this distribution?

Reference no: EM132898749

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