Liquidations-General Rules ($$ 331 and 336). G an individual owns all the stock of T Corporation....

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Liquidations-General Rules ($$ 331 and 336). G an individual owns all the stock of T Corporation. G purchased the stock 15 years ago for $450,000. G decided to completely liquidate T Corporation. The balance sheet of T Corporation immedi- ately prior to the liquidation is as follows: Fair Market Basis Value $ 30,000 $ 30,000 Cash 100,000 90,000 Marketable securities. $400,000 Equipment.. Less: Accumulated depreciation. (170,000) 230,000 280,000 ... 760,000 $1,120,000 810,000 $1,210,000 Land ... Total assets Retained earnings Common stock Total equity $ 670,000 450,000 $1,120,000 .... 1,210,000 $1,210,000 ... .... Assume that G is in the 33% tax bracket and that T corporation is in the 21% tax bracket before the liquidation. Also assume that earnings and profits prior to liqui- dation were equivalent to retained earnings. a. How much gain or loss, if any, will T corporation recognize as a result of the liquidation? b. What is G's recognized gain or loss? c. What is G's basis in the assets received? Liquidations-General Rules ($$ 331 and 336). G an individual owns all the stock of T Corporation. G purchased the stock 15 years ago for $450,000. G decided to completely liquidate T Corporation. The balance sheet of T Corporation immedi- ately prior to the liquidation is as follows: Fair Market Basis Value $ 30,000 $ 30,000 Cash 100,000 90,000 Marketable securities. $400,000 Equipment.. Less: Accumulated depreciation. (170,000) 230,000 280,000 ... 760,000 $1,120,000 810,000 $1,210,000 Land ... Total assets Retained earnings Common stock Total equity $ 670,000 450,000 $1,120,000 .... 1,210,000 $1,210,000 ... .... Assume that G is in the 33% tax bracket and that T corporation is in the 21% tax bracket before the liquidation. Also assume that earnings and profits prior to liqui- dation were equivalent to retained earnings. a. How much gain or loss, if any, will T corporation recognize as a result of the liquidation? b. What is G's recognized gain or loss? c. What is G's basis in the assets received?

Answer rating: 100% (QA)

1 Liquidating Corp Equipment Securities Land Total Amount realized 280000 90000 810... View the full answer