Question: Under a plan of complete liquidation, Coast Corporation distributes land with a $300,000 adjusted basis and a $400,000 FMV to William, a 25% shareholder. William

Under a plan of complete liquidation, Coast Corporation distributes land with a $300,000 adjusted basis and a $400,000 FMV to William, a 25% shareholder. William has a $200,000 basis in his Coast stock. The land is inventory in the hands of Coast Corporation. Coast Corporation must recognize

a. No gain

b. $100,000 of ordinary income.

c. $100,000 of long-term capital gain.

d. $200,000 of ordinary income.

Step by Step Solution

★★★★★

3.42 Rating (168 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

b 100000 of ordinary income Given information Land co... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

68-B-M-A-F-S-A (1146).xlsx

300 KBs Excel File

Students Have Also Explored These Related Managerial Accounting Questions!

Ann is a recent engineering graduate with two years experience in her current role and is currently looking at getting a Masters degree. She is currently paid $60,000 per year, which she expects to...

Crystal Lake Corporation adopts a plan of complete liquidation months later Crystal Lake sells its main asset a lake resort in which it has a basis of 175.000 , for $ 685,000 to an unrelated...

X Co. adopts a plan of complete liquidation and makes the following pro rata distributions to its shareholders (assume all are individuals): A Cash: $70,000; B Inventory: FMV-$20,000 Basis-$20,000...

After a plan of complete liquidation has been adopted, Purple Corporation sells its only asset, land, to Rex (an unrelated party) for $500,000. Under the terms of the sale, Purple receives cash of...

Under a plan of complete liquidation, Coast Corporation distributes land with a $300,000 adjusted basis and a $400,000 FMV to William, a 25% shareholder. William has a $200,000basis in his Coast...

Under a plan of complete liquidation, Coast Corporation distributes land with a $ 3 0 0 , 0 0 0 adjusted basis and a $ 4 0 0 , 0 0 0 FMV to William, a 2 5 % shareholder. William has a $ 2 0 0 , 0 0 0...

1. ________ Crow Corporation has 800 shares of common stock outstanding. Ted owns 300 shares. Teds mother owns 100 shares. Teds sister owns 80 shares, and Teds daughter owns 120 shares. Bluebird...

I need chapter 16: Corporate operation exam file. It is same series with the file that I attached below. The chapter might be different, but the topic is Corporate operation. ch18 Student:...

1.Jason, Inc., is owned by two individual (i.e., noncorporate) shareholders as follows:Ms. A owns 80% and Mr. B owns the remaining 20%.The corporation adopted a plan of complete liquidation on...

Stock redemption is generally treated as an exchange, in which the stockholders give up their stock in exchange for cash or property. However, the Internal Revenue Code (IRC) does provide...

Suppose that next year a worldwide recession is expected and Livingston Co.(from the previous question) believes that cash flow from it's U.S. operations will drop to $100 million. The Korean...

Suppose that, within the simple Keynesian model used in Section 4, the level of government spending (G) was 100, the level of investment spending (I) was 75, and consumption (C) was given by C = 25 +...

if the signaling hypothesis ( which is also called the information content hypothesis ) is correct then dividend policy can have an important effect on the firms value and capital costs

The following situations are similar, but each represents a variation of a particular crime. Identify the crime involved in each of the following situations. (See Cyber Crime.) (a) Chen, posing...

James, Chang, and Sixta are roommates. They are music fans and frequently listen to the same artists and songs. They regularly exchange MP3 music files that contain songs from their favorite artists....

The solid homogeneous cylinder is released from rest on the ramp. If = 40, s = 0.30, and k = 0.20, determine the acceleration of the mass center G and the friction force exerted by the ramp on the...

What is the total for consolidation inventory? Alpha Company Owns 80 percent of the voting stock of beta Company. Alpha and Beta reported the following account information from their year-end...

The earths history is sometimes divided into two eons, Cryptozoic (hidden life) and Phanerozoic (visible life), with the first corresponding to Precambrian time and the second extending from the...

How does technology change the value of natural resources? Cite two examples of technology discovering new value for natural resources.

The following is a list of accounts and their balances for Casa Bella Interiors at May 31 before adjustments and some additional data for the fiscal year ended May 31, 2010. Casa Bella Interiors...

Drive Fast Car Rentals generates revenue by renting high speed sports cars to tourists in the area. When a reservation is made in advance, Drive Fast collects half the weeks rent to hold the...

Selected amounts (at December 31, 2012) from the accounting records of Dans Billiard Supply Company are shown here. No adjustments have been made. Cash paid to employees for salaries and wages......$...

Many celebrities in public figures have Twitter accounts with large number of followers. However, some of these followers are fake, resulting from accounts generated by spam and computers. In a...

The Pebble Beach Company purchased a new machine for $25,000. The useful life of the machine is 5 years and the salvage value is $5,000. Compute the depreciation expense for year 1 and the book value...

Explain carefully why the data observed in the goodness of fit test might not come from a Binomial distribution, making reference to likely relevant characteristics of real training classes. So the...