Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. x-co. adopts a plan of complete liquidation and ma

X-Co. adopts a plan of complete liquidation and makes the following pro rata distributions to...

80.2K

Verified Solution

Question

Accounting

X-Co. adopts a plan of complete liquidation and makes the following pro rata distributions to its shareholders (assume all are individuals):

(A) Cash: $70,000;

(B) Inventory: FMV-$20,000 Basis-$20,000 Mortgage-$10,000;

(C) Inventory: FMV-$30,000 Basis-$15,000 Mortgage-$40,000;

(D) Capital Asset: FMV-$500 Basis-$2,800; (Assume that X Co. acquired the property distributed to D in a Sec. 351 transfer 6 months before adopting the plan of liquidation when the FMV of the property was $800 and X Co.s basis was $2,800).

(E) Capital Asset: FMV-$10,000 Basis-$4,000.

Each shareholder had a $1,000 basis in the X Co. stock.

Question: X Co.'s recognized gain or loss on the distribution to:

C is :

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students