Question

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29. Identify which of the following statements is true.

A) Properties acquired by a liquidating corporation as a capital contribution occurring within three years of the adoption of a plan of liquidation are generally presumed to have a tax avoidance motive.

B) Losses claimed in a tax return filed before the adoption of the plan of liquidation are not restricted by Sec. 336(d)(2).

C) The loss realized on the sale of a property is disallowed when such property was received by a corporation as a contribution of capital in a transaction having as its principal purpose the recognition of loss pursuant to the corporation's subsequent liquidation later in the same taxable year.

D) All of the above are false

30. The general rule for tax attributes of liquidating corporations is

A) they disappear when the liquidation is complete.

B) they carry over for five years.

C) they disappear only for controlled subsidiary corporations.

D) they carry over for an indefinite period of time.

Answer 1

Question 29

Option C

The loss realized on the sale of a property is disallowed when such property was received by a corporation as a contribution of capital in a transaction having as its principal purpose the recognition of loss pursuant to the corporation's subsequent liquidation later in the same taxable year.

Question 30

Option A

The general rule for tax attributes of liquidating corporations is they disappear when the liquidation is complete.

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