Under a Plan of Complete Liquidation, Coast Corporation Distributes Land

question 97

Multiple Choice

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.

---

Definitions:

Latent Learning

A form of learning that occurs without any obvious reinforcement of the behavior or associations that are learned.

Cognitive Map

An internal representation of the spatial relationships between objects in an individual's environment, facilitating navigation and understanding of the world.

Partial Reinforcement

A conditioning schedule in which a response is reinforced only some of the time, leading to more resistant behavior to extinction.

Variable Ratio

Variable ratio is a schedule of reinforcement where a response is reinforced after an unpredictable number of responses, making it highly effective in maintaining behavior after it has been learned.