Homework Answers
| The liquidated corporation always recognizes gain on appreciated property distributed to corporate shareholders. |
| Corporate shareholders owning 80 percent or more of voting power and value receive a tax deferral in a complete liquidation and no gain or loss is recognized. |
| Option D is correct |
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Which of the following statements does not describe a tax consequence to the liquidated corporation in...
25. HolyCow Corporation is liquidated, with Sneha receiving $4,000 in money and other property having a...
25. HolyCow Corporation is liquidated, with Sneha receiving $4,000 in money and other property having a $7,000 FMV. Sneha's basis in his HolyCow stock is $6,000. Upon liquidation, Sneha must recognize a gain of A) 0. B) $5,000. C) $8,000. D) $11,000. 26. Identify which of the following statements is true. A) A liquidating distribution of property other than a disqualified property that is made ratably to all shareholders (based on their stockholdings) will permit the recognition of loss on...
Business Entity 9. Which of the following events does not terminate an S corporation election? One of the corporation's 100 shareholders transfers his shares to three unrelated friends. a. b....
Business Entity
9. Which of the following events does not terminate an S corporation election? One of the corporation's 100 shareholders transfers his shares to three unrelated friends. a. b. The corporation issues a nonvoting preferred class of stock that entitles the holder to receive a greater amount on liquidation. 51% of the shareholders must consent to file a c, revocation. d. One of the corporation's 100 shareholders marries and transfers half of her shares to her husband. 10. The...
19. Geranova Corporation is liquidated, with Vlad receiving $7,500 in money, other property having a $5,000...
19. Geranova Corporation is liquidated, with Vlad receiving $7,500 in money, other property having a $5,000 FMV, and a $2,000 mortgage on the property. Vlad’s basis in his Geranova Co. stock is $7,000. Upon liquidation, Vlad must recognize a gain of A) 2,000. B) $3,500. C) $5,000. D) $12,500. 20. Illinois Corporation is undergoing a complete liquidation and distributes land to Maria, one of its shareholders, in exchange for all of Maria's stock. The land has a basis of $300,000...
Question 1 Which of the following is an incorrect statement regarding the tax consequences of a...
Question 1 Which of the following is an incorrect statement regarding the tax consequences of a § 306 stock disposition? In a sale of § 306 stock, the shareholder generally recognizes ordinary income equal to the fair market value of the preferred stock on the date it was acquired in the stock dividend. No loss is recognized on a sale of § 306 stock. The issuing corporation’s E & P is not reduced by a sale of § 306 stock....
18. Identify which of the following statements is true. A) With limited exceptions, a loss can...
18. Identify which of the following statements is true. A) With limited exceptions, a loss can be recognized by a liquidating corporation when it makes a liquidating distribution of property that has declined in value. B) When computing the corporate-level gain on a liquidating distribution, the FMV of the property cannot exceed the liability assumed or acquired by the shareholder. C) The FMV of property distributed by a liquidating corporation can be less than the amount of the liability assumed...
26. Identify which of the following statements is true. A) A liquidating distribution of property other...
26. Identify which of the following statements is true. A) A liquidating distribution of property other than a disqualified property that is made ratably to all shareholders (based on their stockholdings) will permit the recognition of loss on the portion of the distribution that is made to a related person. B) A subsidiary corporation can recognize losses on distributions to either the parent corporation or minority shareholders in a Sec. 332 liquidation. C) Section 336 prevents recognition of a loss...
Thanks for your HELP!!! 16. Moya Corporation adopted a plan of liquidation last year. All but...
Thanks for your HELP!!! 16. Moya Corporation adopted a plan of liquidation last year. All but a nominal amount of Moya's assets are distributed to its shareholders within the year. Which of the following statements is not true? A) The liquidation of Moya Corporation means the corporation has undergone dissolution. B) Moya Corporation retains its state charter. C) Moya Corporation's existence is preserved. D) Moya Corporation has been liquidated for tax purposes. 17. Riverwalk Corporation is liquidated, with Juan receiving...
Mustang Company was completely liquidated. In the exchange for its 80 percent interest, Bronco Corporation received...
Mustang Company was completely liquidated. In the exchange for its 80 percent interest, Bronco Corporation received and with a for market value of $500.000 Bronco's tax basis in the Mustang stock was $200,000. The land had a tax basis to Mustang Company of $100,000. What amount of gain does Bronco recognize in the exchange, if any, and what is its tax basis in the land it receives? Multiple Choice O No gain recognized and a basis in the land of...
22. Under a plan of complete liquidation, Cain Corporation distributes land (not a property) with an...
22. Under a plan of complete liquidation, Cain Corporation distributes land (not a property) with an adjusted basis of $410,000 and an FMV of $300,000 for all Gary's stock. Gary's basis in his 10% interest in the Cain stock is $250.000. Find Gary's basis in the land and Cain Corporation's recognized gain or loss. A) Recognized Gain/Loss $110,000 loss Recognized Gain/Loss $110,000 loss Basis $300,000 B) Basis $250,000 C) Basis $300,000 D) Basis $250,000 Recognized Gain/Loss SO Recognized Gain/Loss SO...
Which of the following does not correctly describe the primary relationship between a corporation and a...
Which of the following does not correctly describe the primary relationship between a corporation and a shareholder? Multiple Choice If the corporate profits are distributed as dividends, the dividends are included in the shareholder's net income for tax purposes. Profits earned by the corporation are subject to income tax that is the first level of taxation on the income. If the corporate profits are retained, the unrealized gain on share value is included in the shareholder's taxable income. The after-tax...
Business Entity
9. Which of the following events does not terminate an S corporation election? One of the corporation's 100 shareholders transfers his shares to three unrelated friends. a. b. The corporation issues a nonvoting preferred class of stock that entitles the holder to receive a greater amount on liquidation. 51% of the shareholders must consent to file a c, revocation. d. One of the corporation's 100 shareholders marries and transfers half of her shares to her husband. 10. The...
18. Identify which of the following statements is true. A) With limited exceptions, a loss can be recognized by a liquidating corporation when it makes a liquidating distribution of property that has declined in value. B) When computing the corporate-level gain on a liquidating distribution, the FMV of the property cannot exceed the liability assumed or acquired by the shareholder. C) The FMV of property distributed by a liquidating corporation can be less than the amount of the liability assumed...
26. Identify which of the following statements is true. A) A liquidating distribution of property other than a disqualified property that is made ratably to all shareholders (based on their stockholdings) will permit the recognition of loss on the portion of the distribution that is made to a related person. B) A subsidiary corporation can recognize losses on distributions to either the parent corporation or minority shareholders in a Sec. 332 liquidation. C) Section 336 prevents recognition of a loss...
Mustang Company was completely liquidated. In the exchange for its 80 percent interest, Bronco Corporation received and with a for market value of $500.000 Bronco's tax basis in the Mustang stock was $200,000. The land had a tax basis to Mustang Company of $100,000. What amount of gain does Bronco recognize in the exchange, if any, and what is its tax basis in the land it receives? Multiple Choice O No gain recognized and a basis in the land of...
22. Under a plan of complete liquidation, Cain Corporation distributes land (not a property) with an adjusted basis of $410,000 and an FMV of $300,000 for all Gary's stock. Gary's basis in his 10% interest in the Cain stock is $250.000. Find Gary's basis in the land and Cain Corporation's recognized gain or loss. A) Recognized Gain/Loss $110,000 loss Recognized Gain/Loss $110,000 loss Basis $300,000 B) Basis $250,000 C) Basis $300,000 D) Basis $250,000 Recognized Gain/Loss SO Recognized Gain/Loss SO...
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