Black Corporation acquired equipment in a § 351 transaction with an adjusted basis of $200,000 and a fair market value of $110,000, on January 10, 2019.  Black Corporation adopted a plan of liquidation on July 30, 2019.  On November 15, 2019, when the value of the equipment had declined to $50,000, Black Corporation distributed the equipment to Chris, a shareholder who owns 20% of the stock in Black Corporation.  Black Corporation never used the equipment for any business purpose during the time it owned the equipment.  How much loss can Black Corporation recognize on the distribution of the equipment?
a.    $0.
b.    $150,000.
c.    $90,000.
d.    $60,000.

Answer rating: 100% (QA)

The purchase price of the equipment should be taken at the adjusted basis of 200000 which is the ... View the full answer