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Sinclair Corporation converted to a Subchapter S status effective for its 2018 calendar tax year. On January 1, 2018, the corporation owned assets which included (1) a building used in its business with an adjusted basis of $252,720 and a fair market value of $363,600; and (2) machinery with an adjusted basis of $50,640 and a fair market value of $24,000. Sinclair has two equal unrelated shareholders, Julian and David. On January 1, 2020, Julian has a $42,120 basis in his stock and David has a $14,742 basis in his stock. Also on January 1, 2020, Sinclair Corporation has $31,200 in its accumulated adjustments account (AAA) and $45,600 of accumulated earnings and profits from when it was a taxable C corporation. During 2020, Sinclair Corporation had ordinary income from operations of $126,360; a long-term capital loss of $7,800; and charitable contributions of $23,400. On December 31, 2020, Sinclair Corporation distributes the building (now worth $501,960 with an adjusted basis of $252,720) and the equipment (now worth $12,000 with an adjusted basis of $50,640) to its two shareholders equally (each shareholder will own a one-half interest in each asset). Give the tax consequences of these events to Sinclair Corporation and to each of its shareholders for their 2020 tax year, assuming that Sinclair Corporation’s taxable income would be $157,950 if it were a taxable C corporation in 2020.

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