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Good, a C corporation, sells an automobile to its sole shareholder for $4,500. Good's adjusted basis in the automobile is $12,000, and the fair market value is $5,000. What is the amount of loss that is
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31 votes
31 votes
Good, a C corporation, sells an automobile to its sole shareholder for $4,500. Good's adjusted basis in the automobile is $12,000, and the fair market value is $5,000. What is the amount of loss that is recognized by Good

User Treur
by
2.5k points

1 Answer

28 votes
28 votes

Answer:

$0

Step-by-step explanation:

The computation of the amount of loss is shown below:

Generally taxpayers does not subtracted the losses on sales of property that can be with the related parties

And, in the case when a corporation and the shareholder who owns more than 50% of that one corporation so it to be considered as the relevant parties

Therefore the amount is zero

User Andrei Chevozerov
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3.0k points
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