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22. Under a plan of complete liquidation, Cain Corporation distributes land (not a disqualified property) with...

22. Under a plan of complete liquidation, Cain Corporation distributes land (not a disqualified 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)

Basis

Recognized Gain/Loss

$300,000

$110,000 loss

B)

Basis

Recognized Gain/Loss

$250,000

$110,000 loss

C)

Basis

Recognized Gain/Loss

$300,000

$0

D)

Basis

Recognized Gain/Loss

$250,000

$0
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Answer #1

ANSWERD) Basis $250,000; Recognized gain/loss $0 In case of a complete liquidation, Grays final adjusted basis will be the basis o

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