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During 2020, CDE Corporation (An S Corporation Since Its Inception

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During 2020, CDE Corporation (an S corporation since its inception in 2018)liquidates this year by distributing a parcel of land to its sole shareholder, Clark. The fair market value of the land at the time of the distribution was $100,000 and CDE's tax basis in the property was $130,000. Before considering the effects of the distribution, Clark's basis in his CDE stock was $40,000. What amount of loss, if any, does CDE recognize on the distribution? What amount of income, if any, does Clark recognize on the distribution and what is his basis in the land?


Definitions:

Intolerance

An inability to tolerate a substance or a group of substances, often used in the context of food or medication sensitivity.

Light

Light is electromagnetic radiation within a certain portion of the electromagnetic spectrum, perceived by the human eye.

Uvea

The middle layer of the eye consisting of the iris, ciliary body, and choroid.

External Structure

The outer parts or framework of a building, object, or organism.

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