Packard Corporation transferred its 100 percent interest to State Company as par
ID: 2546052 • Letter: P
Question
Packard Corporation transferred its 100 percent interest to State Company as part of a complete liquidation of the company. In the exchange, Packard received land with a fair market value of $300,000. Packard's basis in the State stock was $600,000. The land had a basis to State Company of $500,000. What amount of loss does State recognize in the exchange and what is Packard's basis in the land it receives?
Multiple Choice
$200,000 loss recognized by State and a basis in the land of $300,000 to Packard.
$200,000 loss recognized by State and a basis in the land of $500,000 to Packard.
No loss recognized by State and a basis in the land of $300,000 to Packard.
No loss recognized by State and a basis in the land of $500,000 to Packard.
Explanation / Answer
The correct option is " E " i.e.
No loss recognized by State and a basis in the land of $500,000 to Packard.
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