Billie transferred her 20 percent interest to Jean Company as part of a complete liquidation of the company. In the exchange, she received land with a fair market value of $200,000. Billie's basis in the Jean stock was $100,000. The land had a basis to Jean Company of $400,000. What amount of loss does Jean recognize in the exchange and what is Billie's basis in the land she receives? Billie is not considered a related party to Jean Company.
A. $200,000 loss recognized by Jean and a basis in the land of $200,000 to Billie.
B. No loss recognized by Jean and a basis in the land of $400,000 to Billie.
C. $200,000 loss recognized by Jean and a basis in the land of $400,000 to Billie.
D. No loss recognized by Jean and a basis in the land of $200,000 to Billie.
Answer: A
You might also like to view...
Identify ways in which shopping behaviors differ between men and women
What will be an ideal response?
The profit margin ratio ________.
A) focuses on the liquidity of the business B) is computed by dividing net sales by net income C) shows how much gross profit a business earns on every $1.00 of sales D) is often compared to the industry average
Manager Reggie comes from a culture with a high performance orientation so he is likely to reward group members who
A) have well-developed outside interests. B) share credit for their accomplishments with the work group. C) improve their performance and are excellent performers. D) know how to make him feel like an important manager.
In the idea generation stage of the new-product development process,
A. customers are given new products to test. B. many new ideas in business markets come from competitors. C. a S.W.O.T. analysis helps evaluate new product ideas. D. a firm decides which ideas to pursue based on ROI screening. E. final ROI estimates are done.