CH6+Q++s - Chapter 6 Problems/Solutions 1. The stock in...

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Chapter 6 Problems/Solutions 1. The stock in Ledger Corporation is held equally by two brothers. One year before its liquidation, the shareholders transfer property (basis of $550,000, fair market value of $400,000) to Ledger Corporation in return for stock. In a current year liquidation, Ledger Corporation transfers the property (now worth $300,000) pro rata to the brothers. What amount of loss will Ledger Corporation recognize on the distribution? a. $0. b. $100,000. c. $150,000. d. $250,000. e. None of the above. a The property is disqualified property and was distributed to shareholders who are related parties; thus, none of the loss can be recognized. 2. Global Corporation distributes all of its property in a complete liquidation. Dolly, a shareholder, receives $6,000 cash and securities having a fair market value of $54,000. The securities had been acquired three years ago by Global as an investment for $34,000. Dolly has a $58,000 basis in her Global stock. What is Dolly’s basis in the securities received in the liquidation of Global? a
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This note was uploaded on 02/04/2009 for the course MGMT 133 taught by Professor Armstr during the Spring '09 term at UC Irvine.

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CH6+Q++s - Chapter 6 Problems/Solutions 1. The stock in...

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