18. Identify which of the following statements is true. A) With limited exceptions, a loss can be recognized by a liquid...

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18. Identify which of the following statements is true. A) With limited exceptions, a loss can be recognized by a liquid...

18. Identify which of the following statements is true.

A) With limited exceptions, a loss can be recognized by a liquidating corporation when it makes a liquidating distribution of property that has declined in value.

B) When computing the corporate-level gain on a liquidating distribution, the FMV of the property cannot exceed the liability assumed or acquired by the shareholder.

C) The FMV of property distributed by a liquidating corporation can be less than the amount of the liability assumed or acquired by the shareholder.

D) All of the above are false.

business accounting

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Answer 1

Answer #1

The True answer is A.

As the company which is liquidating all the valuation will be done on the present value and as per the statement a liquidating corporation can recognize loss on liquidating property on declined value as it may attract amortization.

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Answer 2

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