A Corporation Distributes Land and the Related Liability in a Nonliquidating

question 89

Multiple Choice

A corporation distributes land and the related liability in a nonliquidating distribution to a shareholder. The land (a capital asset) has an adjusted basis of $70,000, an FMV of $100,000 and is subject to a mortgage of $120,000. The corporation must recognize

• A)a $20,000 capital loss.
• B)a $50,000 capital gain.
• C)a $70,000 capital gain.
• D)no gain or loss.

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Definitions:

Oligopoly

A market structure characterized by a small number of firms that have significant control over market prices and competition.

Product Differentiation

The distinction between or among goods and services made in the minds of buyers.

Concentration Ratio

A measure used in economics to assess the degree of market concentration, often used to identify the presence of monopolies or oligopolies.

Market Share

The share of a market that a specific company or product holds, commonly described as a proportion of the market's overall sales.