The Stock of Loon Corporation Is Held as Follows: 85

question 26

Multiple Choice

The stock of Loon Corporation is held as follows: 85% by Duck Corporation and 15% by Gerald, an individual. Loon Corporation is liquidated in December of the current year, pursuant to a plan adopted earlier in the year. Loon Corporation distributes land with a basis of $350,000 and fair market value of $390,000 to Gerald in liquidation of his stock interest. Gerald had a basis of $200,000 in his Loon stock. How much gain will Loon Corporation recognize in this liquidating distribution?

• A) $0
• B) $40,000
• C) $190,000
• D) $390,000
• E) None of the above

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Definitions:

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A physical, mental, and spiritual practice originating in ancient India, involving postures, breathing exercises, and meditation, aimed at achieving physical health and spiritual well-being.

Exercise

Physical activity that is planned, structured, and repetitive for the purpose of conditioning any part of the body.

Meditation

A practice of focused attention or contemplation to achieve a mentally clear and emotionally calm state.

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A mental health disorder characterized by excessive fear, worry, or anxiety that interferes with daily activities.