Question: Five shareholders each contribute $ 1 0 , 0 0 0 in exchange for a 2 0 % interest in corporate stock of FIU Corporation.

Five shareholders each contribute $10,000 in exchange for a 20% interest in corporate stock of FIU Corporation. Fifteen years later, FIU Corp. enters into a plan of completeliquidation. Under the plan, FIU Corporation distributes property with a FMV $125,000 and basis of $50,000 in liquidation subject to a $100,000 mortgage to the shareholders.entsWhat are the tax consequences to the shareholders of FIU Corporation?The amount realized by the areholders upon liquidation is net of the liabilityThe net amount received by the shareholders is only $25,000 or $5,000 eachAfter subtracting their $10,000 basis, each shareholder would have a $5,000 capital lossAll of the aboveNone of the above

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