The Stock in Toucan Corporation Is Held Equally by Two

question 34

Multiple Choice

The stock in Toucan Corporation is held equally by two brothers. Four years ago, the shareholders transfer property (basis of $200,000, fair market value of $220,000) to Toucan Corporation as a contribution to capital. In the current year and pursuant to a complete liquidation of Toucan, the property is distributed proportionately to the brothers. At the time of the distribution, the property had a fair market value of $40,000. What amount of loss will Toucan Corporation recognize on the distribution of the property?

• A) $0
• B) $20,000
• C) $160,000
• D) $180,000
• E) None of the above

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Definitions:

D.O.

This can refer to several things; without context, an exact definition cannot be provided. In medical terms, it often stands for Doctor of Osteopathic Medicine.

Mononitration Product

An organic compound resulting from the substitution of one hydrogen atom by a nitro group in a nitration reaction.

Organic Product

A molecule derived from organic chemistry reactions, often characterized by its carbon-based structure and potential complexity.

Electrophilic Aromatic Substitution

A reaction where an electron-rich aromatic ring reacts with an electrophile, resulting in the substitution of a hydrogen atom with the electrophile.