The Stock in Rhea Corporation Is Owned by Jennifer (80%)

question 51

Multiple Choice

The stock in Rhea Corporation is owned by Jennifer (80%) and Lucy (20%) , mother and daughter. In a liquidation of the corporation in the current year, Rhea distributes land that it purchased two years ago for $675,000 to Lucy. The property has a fair market value on the date of distribution of $450,000. One year later, Lucy sells the land for $400,000. What loss, if any, will Rhea Corporation recognize with respect to the distribution of land?

• A) $0
• B) $45,000
• C) $225,000
• D) $275,000
• E) None of the above

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