Casey Corporation Has Three Assets When It Decides to Liquidate

question 75

Multiple Choice

Casey Corporation has three assets when it decides to liquidate: $\begin{array}{lccc}\underline{\text {Asset}}&\underline{\text {Orig. Cost}}&\underline{\text {Basis}}&\underline{\text {Fair Market Value}}\\\text { Machine (Sec. 1231) } & \$ 140,000 & \$ 60,000 & \$ 110,000 \\\text { Building (Sec. 1231) } & \$ 900,000 & \$ 450,000 & \$ 380,000 \\\text { Stocks (Capital) } & \$ 50,000 & \$ 50,000 & \$ 30,000\end{array}$
The corporation sells the stock for its fair market value and distributes the other two assets to its sole shareholder.What is its tax liability on its final tax return in 2018 if it had $45,000 of income from operations prior to liquidating?

• A)$6,750
• B)$5,250
• C)$3,750
• D)$750

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