Chapter c 6 liquidating distributions
Sharon’s basis in her 5% interest in the Key stock is 0,000.Find Sharon’s basis in the land and Key Corporation’s recognized gain or loss.Basis is not affected by the shareholder’s assuming corporate liabilities or receiving corporate property that is subject to a liability (Sec.A distribution in partial liquidation of the S corporation will also qualify for sale or exchange treatment under Sec.302 if the distribution is pursuant to a plan and occurs within the tax year the plan is adopted or the following tax year and the “safe harbor” of Sec.A) A loss recognized by a shareholder upon complete liquidation of a corporation may not qualify for ordinary loss treatment if the stock is Sec. B) The loss that is recognized by an individual shareholder on the liquidation of a corporation is a capital loss, up to certain limits, if the stock is Sec. C) The loss recognized by a corporate shareholder on the worthlessness of the controlled subsidiary’s stock is an ordinary loss. A) With limited exceptions, a loss can be recognized by a liquidating corporation when it makes a liquidating distribution of property that has declined in value.D) All of the above are false.26) Under a plan of complete liquidation, Coast Corporation distributes land with a 0,000 adjusted basis and a 0,000 FMV to William, a 25% shareholder. The land is inventory in the hands of Coast Corporation. B) When computing the corporate-level gain on a liquidating distribution, the FMV of the property cannot exceed the liability assumed or acquired by the shareholder.receives ,000 in 2007 and an additional 5,000 in 2008, each distribution is allocated ratably between the blocks based on the number of shares in each block.(a) Unless otherwise provided in a limited liability company agreement, a manager who has not wrongfully dissolved a limited liability company or, if none, the members or a person approved by the members, in either case, by members who own more than 50 percent of the then current percentage or other interest in the profits of the limited liability company owned by all of the members, may wind up the limited liability company's affairs; but the Court of Chancery, upon cause shown, may wind up the limited liability company's affairs upon application of any member or manager, or the member's personal representative or assignee, and in connection therewith, may appoint a liquidating trustee.
For purposes of the immediately preceding sentence, the term "distribution'' shall not include amounts constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of business pursuant to a bona fide retirement plan or other benefits program.23) Property received in a corporate liquidation by a noncorporate shareholder has A) a basis equal to its basis on the liquidating corporation’s books increased by any gain recognized by the shareholder upon receipt of the property.Its holding period includes the holding period of the shareholder’s stock.A)Basis Recognized Gain/Loss0,0000,000 loss B)Basis Recognized Gain/Loss0,0000,000 loss C)Basis Recognized Gain/Loss0,000$-0-D)Basis Recognized Gain/Loss0,000$-0-29) Barnett Corporation owns an office building that cost 0,000. Barnett Corporation is liquidated and the office building is distributed to a single individual shareholder who assumes the mortgage. D) none of the above30) Identify which of the following statements is true.Barnett has taken 0,000 of depreciation on the building. Barnett Corporation must recognize A) no gain or loss. A) A liquidating distribution of property other than a disqualified property that is made ratably to all shareholders (based on their stockholdings) will permit the recognition of loss on the portion of the distribution that is made to a related person.