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. The Gain or Loss recognized by E is.
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. The Gain or Loss recognized by E is.
Chapter6: Corporations: Redemptions And Liquidations
Section: Chapter Questions
Problem 54P
Related questions
Question
![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.
The Gain or Loss recognized by E is.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0ef90504-d26e-43d9-baec-9ec9067ca391%2F7175ec51-e7ec-4617-a64d-bac0833c14df%2Fwp82sjs_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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.
The Gain or Loss recognized by E is.
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