Market Corporation owns 100% of Subsidiary Corporation's stock. Market Corporation completely liquidates Subsidiary Corporation, receiving land with a $400,000 adjusted basis and a $500,000 FMV in exchange for Subsidiary stock, which has a $300,000 adjusted basis. Market Corporation has a basis in the land of _________.
A) $300,000.
B) $400,000.
C) $500,000.
D) none of the above
B) $400,000.
Section 334(b)(1) provides for a carryover basis.
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Which of the following is an inventory valuation method?
A) First-in, first-out B) Average-cost C) Lower-of-cost-or-market D) Perpetual
Flynn acquires 100 percent of the outstanding voting shares of Macek Company on January 1, 2018. To obtain these shares, Flynn pays $400 cash (in thousands) and issues 10,000 shares of $20 par value common stock on this date. Flynn's stock had a fair value of $36 per share on that date. Flynn also pays $15 (in thousands) to a local investment firm for arranging the acquisition. An additional $10 (in thousands) was paid by Flynn in stock issuance costs.The book values for both Flynn and Macek as of January 1, 2018 follow. The fair value of each of Flynn and Macek accounts is also included. In addition, Macek holds a fully amortized trademark that still retains a $40 (in thousands) value. The figures below are in thousands. Any related question also is in thousands. Flynn, Inc Macek
Company Book Value Fair ValueCash$900 $80 $80 Receivables 480 180 160 Inventory 660 260 300 Land 300 120 130 Buildings (net) 1,200 220 280 Equipment 360 100 75 Accounts payable 480 60 60 Long-term liabilities 1,140 340 300 Common stock 1,000 80 Additional paid-in capital 200 0 Retained earnings 1,080 480 ?What amount will be reported for consolidated inventory? A. $920,000. B. $660,000. C. $960,000. D. $620,000. E. $1,000,000.
With regard to a limited partner's capital contribution to the limited partnership:
A) the limited partner can only contribute cash. B) a promise by a limited partner to contribute to the limited partnership is not enforceable unless it is in a signed writing. C) if the partner fails to make a promised capital contribution, the limited partnership has no power to hold the partner liable. D) All of these.