14. Which statement about corporate liquidating distributions is true? Question 14 options:

Corporations cannot recognize losses on liquidating distributions

Corporations must recognize both gains and losses on liquidating distributions

None of the above

16. Colter Corporation has two shareholders: Arlen with 70 shares and Marcy with 30 shares. Colter has E&P of $100,000 and capital stock and paid-in-capital accounts totaling $200,000. Colter redeems 10 of Arlen's shares for $31,000. Arlen paid $2,000 per share for the shares 5 years ago. As a result of this transaction _____________________.

	Arlen will have dividend income of $31,000.
	Colter's E&P will be reduced by 10% of the outstanding E&P on the distribution.
	None of the above.

18. Vallely Corporation liquidates its 90% owned subsidiary, Langley Corporation. Prior to the liquidation, Langley's minority shareholders' stock was redeemed by distributing marketable securities with a basis of $450,000 and a market value of $400,000 to them in cancellation of their stock. The minority shareholders had a basis of $350,000 in their stock. Provide the best answer from the list below for the tax treatment of this transaction.

Question 18 options:

	Langley will have no recognized loss on the distribution of the securities.
	The minority shareholders will have a capital gain of $50,000
	The second and third choices are both true

21.Oxnard Corporation has accumulated E&P of negative $40,000 and current E&P of $50,000. Oxnard made a $60,000 dividend distribution to its shareholders during the year. As a result of this distribution _______.

	the corporation's accumulated E&P at the end of the year will equal negative $50,000
	the corporation's accumulated E&P at the end of the year will equal negative $40,000.
	The shareholders' total basis in stock will stay the same as before the distribution