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The stock of Ajax Corp. is owned 60 percent by Brian and 40 percent by Dave, who are unrelated individuals.

The stock of Ajax Corp. is owned 60 percent by Brian and 40 percent by Dave, who are unrelated individuals. During 2010, Brian transferred land (with a basis to Brian of $300,000 and a fair market value of $200,000) as a contribution to capital to Ajax Corp. During March 2011, Ajax Corp. adopted a plan of liquidation and subsequently made a non pro rata distribution of the land to Dave. At the time of the liquidating distribution, the land had a FMV of $180,000.What amount of loss can be recognized by Ajax Corp. on the distribution of land to Dave?

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Question:
The stock of Ajax Corp. is owned 60 percent by Brian and 40 percent by Dave, who are
unrelated individuals. During 2010, Brian transferred land (with a basis to Brian of $300,000 and
a...

Sign up to view the full answer

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