AX corporation is owned by V Corporation which has 70 shares and an individual who has 30.
Question:
AX corporation is owned by V Corporation which has 70 shares and an individual who has 30. V's basis in AX is $300,000 and individual's basis is $100,000. V Corporation wants to liquidate AX Corporation. In order to do this, V needs to purchase individual's share for $150,000 in the current year.
The following year, it shows this
Basis FMV
Cash 350k. 350k
A/R 75k 75k
Equip 1 140k 80k
Equip 2 30k 50k
Land A 200k 175k
Land B 200k 300k
Mort Pay 150k 150k
O/E 400k 1,000,000
Total 550k 1,500,000
AX Corps distributes the inventory and 30k to individual. The remaining assets, including mortgage payable on Land B distributed to V Corp.
What is AX's Corp's recognized gain or loss on the transactions noted above using the tax code on corporate liquidation?
South Western Federal Taxation 2016 Corporations Partnerships Estates And Trusts
ISBN: 9781305399884
39th Edition
Authors: James Boyd, William Hoffman, Raabe, David Maloney, Young