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 $30,000 and basis of $50,000 in liquidation subject to a $100,000 mortgage to the shareholders.What are the tax consequences to FIU Corporation?The corporation will have a $75,000 lossThe corporation will have a $75,00 gainThe corporation will have a $50,000 gainThe corporation will have a $50,000 lossThe loss limitation rules apply

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