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recognizes no gain or loss on Block 2 ($30,000 – $40,000 basis) and has a remaining basis of $10,000 in Block 2.
The 2008 distribution is allocated $45,000 to Block 1 (10 ÷ 30 × $135,000) and $90,000 to Block 2 (20 ÷ 30 × $135,000).
The Small Business Job Protection Act, passed by Congress in August 1996, was intended to provide tax breaks for small businesses as well as to impose tighter rules on expatriates, foreign trusts and entities doing business in Puerto Rico.
Also included in the act were numerous changes to the rules governing the use of S corporations.
recognizes a $45,000 gain on Block 1 ($45,000 – $0 basis) and an $80,000 gain on Block 2 ($90,000 – $10,000 basis).
The character of gain or loss recognized by the S shareholder depends on whether the stock is a capital asset in the shareholder’s hands and whether the transaction constitutes a complete or a partial liquidation of the corporation.The goal of most individuals and families is to minimize the impact of the federal estate tax at death.But, with the exemption at .43 million for 2015 deaths and “portability” of the amount of any unused exclusion at the death of the first spouse for use by the surviving spouse, the estate tax is not an issue except for very few estates.Also, farmland values have increased significantly in recent years, virtually matching (in percentage terms) the percentage increase in the federal estate tax exemption.So, for larger agricultural estates, the increase in the exemption is basically worth about the same as it was several years ago.The new law clarified two important issues concerning the BIG tax holiday: First, it allows gain from an installment sale of qualified property to be exempt from Sec.