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Tax Accounting

Questions 25-35 are based on the following information:

Z Co. adopts a plan of complete liquidation and makes the following pro rata distributions to its shareholders (assume all are individuals and each has a $2,000 basis in the Z Co. stock):

ACash
   $40,000
BCapital AssetFMV                $30,000


BASIS   $10,000


MORTGAGE   $20,000
CCapital AssetFMV   $50,000


BASIS   $10,000


MORTGAGE   $80,000
DCapital AssetFMV   $1,400


BASIS   $3,000
(Assume that Z Co. acquired the property distributed to D in a Code § 351 transfer 6 months before adopting a plan of liquidation when the FMV of the property was $1,800 and Z Co.'s basis was $3,000)
EInventoryFMV   $50,000


BASIS   $20,000

 

Flag question: Question 25

Question 252 pts

B's basis in the property received is

Group of answer choices

$10,000

$20,000

$30,000

None of these.

 

Flag question: Question 26

Question 262 pts

Z Co.'s recognized gain or loss on the distribution to A is

Group of answer choices

None of these.

$35,000 capital gain

<$40,000> ordinary loss

0

 

Flag question: Question 27

Question 272 pts

Z Co.'s recognized gain or loss on the distribution to B is

Group of answer choices

None of these.

$20,000 capital gain

$10,000 capital gain

0

 

Flag question: Question 28

Question 282 pts

Z Co.'s recognized gain or loss on the distribution to C is

Group of answer choices

$70,000 capital gain

None of these.

$20,000 capital gain

$40,000 gain

 

Flag question: Question 29

Question 292 pts

Z Co.'s recognized gain or loss on the distribution to D is 

Group of answer choices

<$1,600> capital loss

0

<$400> capital loss

None of these.

 

Flag question: Question 30

Question 302 pts

Z Co.'s recognized gain or loss on the distribution to E is

Group of answer choices

0

$30,000 ordinary income

$30,000 capital gain

None of these.

 

Flag question: Question 31

Question 312 pts

The gain or loss recognized by A is

Group of answer choices

$38,000 capital gain

None of these.

<$2,000> capital loss

0

 

Flag question: Question 32

Question 322 pts

The gain or loss recognized by B is

Group of answer choices

0

$8,000 capital gain

$28,000 capital gain

None of these.

 

Flag question: Question 33

Question 332 pts

The gain or loss recognized by C is 

Group of answer choices

<$32,000> capital loss

$78,000 capital gain

$48,000 capital gain

None of these.

 

Flag question: Question 34

Question 342 pts

The gain or loss recognized by D is

Group of answer choices

<$600> capital loss

None of these.

$1,400 capital gain

0

 

Flag question: Question 35

Question 352 pts

The gain or loss recognized by E is

Group of answer choices

$48,000 capital gain

0

$48,000 ordinary income

None of these.


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