Finch Corporation Distributes Property (Basis of $225,000, Fair Market Value

question 157

Multiple Choice

Finch Corporation distributes property (basis of $225,000, fair market value of $300,000) to a shareholder in a distribution that is a qualifying stock redemption. The property is subject to a liability of $160,000, which the shareholder assumes. The basis of the property to the shareholder is:

• A) $-0-.
• B) $140,000.
• C) $225,000.
• D) $300,000.
• E) None of these.

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Definitions:

Tolerance

The allowable deviation in the value of a component or system from its specified value, often expressed as a percentage.

Metal Film

A type of resistor that uses a thin metal film as the resistive element to provide stability and accuracy.

Ceramic Rod

A rod made of ceramic material, often used in applications requiring high temperature resistance or electrical insulation.

Composition Carbon

Likely refers to carbon composition resistors, electronic components made from carbon dust or graphite paste, used for their stable electrical resistance.