Brody owns all the stock in Mongoose Corporation. Brody has a basis of $200,000

Question

Brody owns all the stock in Mongoose Corporation. Brody has a basis of $200,000 in the Mongoose stock, which currently has a fair market value of $500,000. Mongoose is merged into Chestnut Corporation. Brody receives Chestnut preferred stock worth $200,000 and common stock worth $300,000. Brody recognizes a gain of O $300,000 O $100,000 O $200,000 O None of the above QUESTION 2 10 points Save Anwer During the current yer, Neptune Corporation is liquidated and distributes its only asset, land, to Taylor, the sole shareholder. On the datc of distribution, the land has a basis of $200,000, a fair market value of $550,000, and is subject to a liability of $300,000. Taylor, who takes the land subject to the liability, has a basis of $75,000 in the Neptune stock With respect to the distribution of the land, which of the following statements is correct? O Taylor has a basis of $250,000 in the land Tryormongrures a gain of $475,000. O Neptune Corporation recognines a gain of $100,000. Taylor has a basis of $200,000 in the lard Taylor recognizes a gain of $175,000. 10 points Save Answer QUESTION 3 Fir Corporation distributes all of its property in a complete liquidation. Debbie, a shareholder receives SS 000 cash and se unties having a fair market value of S32,0 The securities had been acquired three years ago by Fir as an investment for $24,000. Debbie has a $38,000 basis in her Fir stock What is Debbie's basis in the securities received in the liquidation of Fir? 532.000 O $38,000 $24,000 o so None of the above

Explanation / Answer

Question 1: Brody owns all the stock in Mongoose Corporation. Brody has a basis of $200,000 in theMongoose stock, which currently has a fair market value of $500,000. Mongoose ismerged into Chestnut Corporation. Brody receives Chestnut preferred stock worth$200,000 and common stock worth $300,000. Brody recognizes a gain of:

Answer : $0

Question 2: During the current year, Neptune Corporation is liquidated and distributes its only asset,land, to Taylor, the sole shareholder. On the date of distribution, the land has a basis of$200,000, a fair market value of $550,000, and is subject to a liability of $300,000.Taylor, who takes the land subject to the liability, has a basis of $75,000 in the Neptunestock. With respect to the distribution of the land, which of the following statements iscorrect?

Answer: Taylor recognizes a gain of $175,000

Question 3: Fir Corporation distributes all of its property in a complete liquidation. Debbie, ashareholder, receives $8,000 cash and securities having a fair market value of $32,000.The securities had been acquired three years ago by Fir as an investment for $24,000.Debbie has a $38,000 basis in her Fir stock. What is Debbie's basis in the securitiesreceived in the liquidation of Fir

Answer: $32,000

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.