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Unformatted text preview: (c) What is the tax effect on Liquid, Major and Minorif Liquid distributes 80% of each asset to Major and 20% of each asset to Minor? (d) Same as (b) EXCEPT Major is a corporation (i.e., the parent corporation) and not an individual taxpayer. Part 2: Liquidating distributions & the built-in loss rules A shareholder transfers land (and other assets) to Liquid2 Corporation (basis = $10,000; fair value = $8,000), in a transfer that qualifies for Sec. 351 treatment. 1 years later, as part of plan of liquidation, Liquid2 corporation sells the land for its fair value of $4,500. Assuming Liquid2 held the land for investment, how much loss (if any) may Liquid2 recognize on the sale?...
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- Spring '08