Hazzard Corporation is a C corporation owned by Bo and Luke, two individuals who are (assume) unrelated. Bo owns 80% and Luke owns 20% of Hazzard Corporation. The following assets are to be distributed in complete liquidation of Hazzard Corporation:

Adjusted Basis

Cash                            300,000

Inventory                    75,000

Investment Land         200,000

Fair Market Value

Cash                            300,000

Inventory                    100,000

Investment Land         100,000

All of the assets were purchased by Hazzard Corporation many years ago. (Fully explain answer)

What gain or loss would Hazzard recognize if it distributes the cash and land to Bo and the inventory to Luke in liquidation?

Answer rating: 100% (QA)

When a corporation undergoes complete liquidation the assets are distributed to its share... View the full answer