Whaler Corporation Makes a Liquidating Distribution of Land with a $70,000

question 1019

Essay

Whaler Corporation makes a liquidating distribution of land with a $70,000 adjusted basis and a $100,000 FMV t shareholder Horton, who surrenders his Whaler stock (adjusted basis $60,000) to the corporation. Alice, another shareholder, receives $100,000 cash for her shares ($115,000 adjusted basis).
a. What are the tax consequences to Whaler Corporation?
b. What are the tax consequences to both Horton and Alice?
c. What is Horton's basis in the land?

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