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Penguin Corporation (E & P of $500,000) distributes land (fair market value of $150,000; basis of...

Penguin Corporation (E & P of $500,000) distributes land (fair market value of $150,000; basis of $160,000) to an estate in a redemption to pay death taxes under § 303. Penguin Corporation recognizes a $10,000 loss as a result of the distribution.

True

False

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Answer #1

Fair market value = $150,000

Basis = $160,000

Loss as a result of distribution = $150,000 - $160,000 = -$10,000

The statement, "Penguin Corporation recognizes a $10,000 loss as a result of the distribution" is True.

Answer is True.

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