A Corporation, the world famous Zimba Corp, was formed by three different shareholders, on January 1, 2011. The shareholders contributed the following assets to the corporation. Name of S/H Number of Shares Asset Basis in Hands FMV Of Owner Aluga Corp 300 Cash $100,000 $100,000 Spiderman 300 Land $ 50,000 $100,000 Doctor Evil 300 Building $ 20,000 $100,000 Debt of $30,000 Problem 1. Part 1. Please define the tax ramifications to both Zimba Corporation and the shareholders. I would like to see the basis in the assets or shares for each entity. Part 2. During the 2011, Zimba Corp lost money and ended up with an accumulated deficit in E&P of $70,000. During the years 2012 and 2013, Zimba Corp. made money, and the current E&P for the 2012 year was $20,000, and $40,000 for 2013. During 2013, the corporation made a distribution of $30,000 to each shareholder. Please explain the tax ramifications for Zimba Corporation and the shareholders
