K Purchased All 100 Shares of N Corporation in 2004

question 30

Multiple Choice

K purchased all 100 shares of N Corporation in 2004 for $50,000.N Corporation adopts a plan of liquidation on January 1, 2012.On May 1, 2012, N sells its only asset, land, for $10,000 cash and an installment note with a face amount and fair market value of $90,000.On December 1, 2012, N distributes the cash and note to K.On her 2012 tax return, K will report which of the following as gain from the liquidation? (Assume no collections on the installment note during 2012.)

• A)$0
• B)$5,000
• C)$50,000
• D)$100,000

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