Texas Corporation Is Undergoing a Complete Liquidation and Distributes Land

question 11

Multiple Choice

Texas Corporation is undergoing a complete liquidation and distributes land to Robert, one of its shareholders, in exchange for all of Robert's stock. The land has a basis of $300,000 and an FMV of $400,000 on Texas Corporation's books and is subject to a $325,000 liability. Robert assumes the liability on the property. Robert's basis in his Texas Corporation stock is $100,000. What is the amount of gain or loss recognized by Robert on the distribution?

• A)$175,000 gain
• B)$25,000 gain
• C)$25,000 loss
• D)No gain or loss is recognized.

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Definitions:

Compliance Orientation

An approach within organizations that emphasizes adherence to rules, regulations, and established protocols as a way to ensure ethical behavior.

Values Orientation

An approach or mindset that prioritizes ethical values and standards in decision-making processes.

Specific Required Conduct

Actions or behavior explicitly demanded or expected from an individual in accordance with certain rules, regulations, or expectations.

Ethics Officer

A professional responsible for developing, implementing, and overseeing policies and procedures to ensure ethical behavior within an organization.