The stock of QRS Corp is owned 50% by Gold Corporation, 30% by Copper Corp, a wholly owned subsidiary of Gold Corporation, and 20% by Jill Greene. As of June 30, 2019, QRS Corp had the following assets:

Adjusted Basis FMV

Cash $ 30,000 $ 30,000

Equipment 164,000 276,000

Land 194,000 180,000

Verizon stock 50,000 114,000

Gold Corporation acquired its stock in 2005 paying $120,000 for it, Copper Corp acquired its stock in 2009 paying $80,000 for it and Greene acquired her stock in 2014 paying $45,000 for it. QRS Corp did not acquire any of its assets in the prior five years.

On June 30, 2022, QRS Corp. adopts a plan of liquidation and immediately distributes its assets to Gold Corporation, Copper Corp and Greene. Gold Corporation receives the Equipment and $24,000 of cash. Copper Corp receives the Land. Greene receives the Verizon stock and $6,000 of cash.

a) What is the amount of gain or loss to be recognized by Gold Corporation, Copper Corp and Greene as a result of their receipt of the assets of QRS Corp?

b) What is the amount of gain or loss to be recognized by QRS Corp as a result of the distribution of its assets to Gold Corporation, Copper Corp and Greene?

c) What is Gold Corporation's basis in the Equipment receives?

d) What is Copper Corp's basis in the Land it receives?

e) What is Greene's basis in the Verizon stock she receives?

Answer rating: 100% (QA)

a Gain or Loss Gold Corporation Equipment FMV 276000 Original Cost 120000 Basis in QRS stockto be ca... View the full answer