Corporation W onws 100% of the common stock of Corporation Z with a basis of $300. Z owns a rental building (its only assets) with a gross fair market value of $3,000, subject to a non-recourse mortgage of $1,200. Z's adjusted basis for this building is $900. Z has $600 of E&P. Z is on the accrual method of accounting and reports on the calendar year. Z and W do not report on a consolidated basis. Z distributes the building to W in complete liquidation and W sells the building to Corparation V for $1,800 cash, subject to the debt.
New assumption: same facts as above, except that W owes Z additionally $1,200
a W has forgiveness of indebtedness income on the liquidation
b Section 332 does not apply.
c Section 332 applies and W recognizes no income
d None of the above
Which one is the correct answer?
Solution
C is the correct answers
C Section 332 applies and W recognizes no income
Corporation W onws 100% of the common stock of Corporation Z with a basis of $300....
Cashew Corporation gives its voting stock worth $900,000 and a building worth $300,000 with a basis of $375,000 for the assets of Brazil Corporation worth $1,200,000 and basis of $700,000. Brazil distributes the stock in Cashew Corporation to its sole shareholder. Which, if any, of the following statements regarding this transaction is correct? Cashew recognizes a loss of $75,000 on the transaction. Cashew recognizes a loss of $75,000 on the transaction. Brazil recognizes a gain of $300,000 on the transaction....
68 Carl transfers land to Cardinal Corporation for 90% of the note payable to Carl in the amount of $40,000 and the assumption by Cardina land in the amount of $100,000. The land, which has a basis to a. Carl will have a recognized gain on the transfer of $90,000 b. Carl will have a recognized gain on the transfer of $30,000 C. Cardinal Corporation will have a basis of $70,000 in the land transferred by Carl d. Cardinal Corporation...
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