Shao and Dong were each shareholders of ShaoDong Corp., a C corporation. They decided to completely...

 

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Shao and Dong were each shareholders of ShaoDong Corp., a C corporation. They decided to completely liquidate ShaoDong Corp. this year. After liquidating its remaining inventory and paying off its remaining liabilities (including paying any tax imposed on the corporation as a result of gain recognized from the liquidation), ShaoDong Corp. had the following tax accounting balance sheet: Adjusted Basis $135,000 $135,000 13,500 54,000 $270,000 $202,500 FMV Appreciation Cash Building 27,000 Land 13,500 54,000 $67,500 108,000 Total Shao will receive the $135,000 cash in exchange for her 50 percent interest in ShaoDong Corp. Shao's stock basis at time of liquidation is $33,750. Dong will receive the land and building in exchang for his 50 percent interest in ShaoDong Corp. Dong's stock basis at time of liquidation is $67,500. (Negative amounts should be indicated by a minus sign.) What amount of gain or loss does Shao recognize as a result of the liquidation? Gain or loss recognized What is Dong's basis in the land and building after the liquidation? Building Land Tax basis Shao and Dong were each shareholders of ShaoDong Corp., a C corporation. They decided to completely liquidate ShaoDong Corp. this year. After liquidating its remaining inventory and paying off its remaining liabilities (including paying any tax imposed on the corporation as a result of gain recognized from the liquidation), ShaoDong Corp. had the following tax accounting balance sheet: Adjusted Basis $135,000 $135,000 13,500 54,000 $270,000 $202,500 FMV Appreciation Cash Building 27,000 Land 13,500 54,000 $67,500 108,000 Total Shao will receive the $135,000 cash in exchange for her 50 percent interest in ShaoDong Corp. Shao's stock basis at time of liquidation is $33,750. Dong will receive the land and building in exchang for his 50 percent interest in ShaoDong Corp. Dong's stock basis at time of liquidation is $67,500. (Negative amounts should be indicated by a minus sign.) What amount of gain or loss does Shao recognize as a result of the liquidation? Gain or loss recognized What is Dong's basis in the land and building after the liquidation? Building Land Tax basis

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1 GAIN OR LOSS RECOGNIZED BY SHAO AS A RESULT OF LIQUIDATION ... View the full answer