What Is Alexander's Net Gain or Loss on the Liquidation

question 67

Multiple Choice

What is Alexander's net gain or loss on the liquidation of his 100 percent interest in an S corporation if the corporation distributes the following three assets to him in exchange for his stock: $\begin{array}{lll}\text { Asset }&\text { FMV }&\text { Adj. Basis }\\\hline\text { Inventory } & \$ 20,000 & \$ 13,000 \\\text { Machines } & \$ 50,000 & \$ 60,000 \\\text { Building } & \$ 100,000 & \$ 75,000\end{array}$ Prior to any distributions, Alexander's basis in his S corporation interest was $160,000.

• A) ($12,000)
• B) ($22,000)
• C) $10,000
• D) $22,000

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