Cowboy Corporation Owns 90% of the Single Class of Stock $$\begin{array} {| l | l |} \hline \text { Doggie } & \text { Cowboy } \\\hline \$ 0 & \$ 0 \\\hline\end{array}$$

question 21

Multiple Choice

Cowboy Corporation owns 90% of the single class of stock in Doggie Corporation.The other 10% is owned by Miguel,an individual.Cowboy's basis in its Doggie Corporation stock is $100,000 and Miguel's basis is $50,000.Doggie Corporation distributes property having an adjusted basis of $150,000 and an FMV of $500,000 to Cowboy Corporation,and $60,000 of money to Miguel as a liquidating distribution.Doggie and Cowboy Corporations must recognize gain of:

• A) \[\begin{array} {| l | l |}
• \hline \text { Doggie } & \text { Cowboy } \\
• \hline \$ 0 & \$ 0 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l |}
• \hline \text { Doggie } & \text { Cowboy } \\
• \hline 10,000 & \$ 0 \\
• \hline
• \end{array}\]
• C) \[\begin{array} {| l | l| }
• \hline \text { Doggie } & \text { Cowboy } \\
• \hline \$ 400,00 & \$ 350,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} {| l | l |}
• \hline \text { Doggie } & \text { Cowboy } \\
• \hline \$ 350,000 & \$ 400,000 \\
• \hline
• \end{array}\]

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