Malcolm Receives a Liquidating Distribution of Land with a Fair

question 62

Short Answer

Malcolm receives a liquidating distribution of land with a fair market value of $14,000 and a basis of $19,000 from Blithe Corporation,an S corporation.Malcolm's basis in the stock is $21,000.What must Malcolm and Blithe report as income (loss)from the property distribution?
$\begin{array}{ll}&\text { Malcolm } & \text { Blithe } \\ \text { a. } &\$-0- & \$-0-\\b.&\$2,000&\$5,000\\c.&\$7,000&\$-0-\\d.&\$7,000&5,000\end{array}$

---

Definitions:

Negative Reinforcement

A process in conditioning where the removal of an unfavorable outcome or stimulus strengthens the behavior that preceded it.

Aversive Event

An unpleasant or harmful event or stimulus that is often used as a deterrent in behavior modification techniques.

Car Wreck

An unexpected and violent collision involving one or more vehicles, often resulting in damage and injury.

Blood

A vital bodily fluid in humans and animals that delivers necessary substances such as nutrients and oxygen to cells and transports metabolic waste products away.