Gary and Laura decided to liquidate their jointly owned corporation, Amelia, Inc. After liquidating its remaining inventory and paying off its remaining liabilities, Amelia had the following tax accounting balance sheet. Adjusted basis FMV AppreciationCash$100,000 $100,000 Building150,000 200,000 50,000Land50,000 120,000 70,000Total$300,000 $420,000 $120,000 Under the terms of the agreement, Gary will receive the $100,000 cash in exchange for his interest in Amelia. Gary's tax basis in his Amelia stock is $30,000. Laura will receive the building and land in exchange for her interest in Amelia. Laura's tax basis in her Amelia stock is $60,000.What amount of gain or loss does Gary recognize in the complete liquidation?
What will be an ideal response?
Gary recognizes gain of $70,000 on the transfer of his stock to Amelia ($100,000 ? $30,000) in complete liquidation of Amelia.
Distributions in complete liquidation to individual shareholders are taxable to the shareholders.
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Use this information to answer the following question. Dec. 1 Inventory 15 units @ $4.00 8 Purchase 60 units @ $4.40 17 Purchase 30 units @ $4.20 25 Purchase 45 units @ $4.80 Total sales 100 units A periodic inventory system is used. Cost of goods sold under the average-cost method is
A) $444. B) $333. C) $435. D) $222.
The Rehabilitation Act:
a. requires all employers with 20 or more workers to take affirmative steps to employ the handicapped. b. has been recently amended to categorically remove those with AIDS from its protection. c. states that a person addicted to cigarette smoking is handicapped under the Act. d. does not consider drug and alcohol abuse handicapping conditions for the purposes of the statute.
Paul Company is considering purchasing a capital investment that is expected to provide annual cash inflows of $10,100 per year for 3 years. Assuming that the required rate of return is 9%, what is the present value of these cash inflows? Use Appendix Table 2. (Do not round PV factors and intermediate calculations. Round your final answer to the nearest dollar.)
A. $27,798 B. $25,566 C. $23,397 D. $25,503
In short-term cash management as it pertains to the operations of the firm, which of the below is NOT one of the general objectives?
A) Determining the cash surplus B) Determining the job satisfaction level of employees C) Determining the money the company can invest D) Determining the cash deficit