# Steel Corporation sells a truck for \$24,000 to Jenny, who owns 5555% of its stock. The truck has

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Steel Corporation sells a truck for \$24,000 to Jenny, who owns 5555% of its stock. The truck has a \$31,000 adjusted basis on the sale date. Jenny sells the truck to an unrelated party, Manny, for \$32,000 two years later after claiming \$10,000 in depreciation.

Requirements

a.
What is Steel's realized and recognized gain or loss on selling the truck?
b.
What is Jenny's realized and recognized gain or loss on selling the truck to Manny?
c.
Requirement a. What is Steel's realized and recognized gain or loss on selling the truck?

Begin by computing the realized gain or loss. (Use parentheses or a minus sign for a loss.)

-

=
Realized gain (loss)

-

=

Steel does not recognize the

Loss because

Jenny is the controlling shareholder of the corporation.

Requirement b. What is Jenny's realized and recognized gain or loss on selling the truck to Manny?

Begin by computing the realized gain or loss. (Use parentheses or a minus sign for a loss.)

-

=
Realized gain (loss)

-

=

Jenny's recognized

is \$

.

JennyJenny

\$ 6 comma 000\$6,000?

Begin by computing the realized gain or loss. (Use parentheses or a minus sign for a loss.)

-

=
Realized gain (loss)

-

=

Jenny's recognized

is \$

.