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General Inertia Corporation made a pro rata distribution of $50,000 to Tiara, Incorporated in partial liquidation of the company on December 31, 20X3. Tiara, Incorporated owns 500 shares (50 percent) of General Inertia. The distribution was in exchange for 250 shares of Tiara's stock in the company. After the partial liquidation, Tiara continued to own 50percent of the remaining stock in General Inertia. At the time of the distribution, the shares had a fair market value of $200 per share. Tiara's income tax basis in the shares was $100 per share. General Inertia had total E&P of $800,000 at the time of the distribution. What amount of dividend or capital gain does Tiara recognize because of the transaction?
Economic Modernization
The process by which an economy transforms from primarily agricultural to one based on the manufacturing of goods and services, often involving technological innovation and changes in socio-economic structures.
Constant Growth
A state or condition of a system, such as an economy or a population, where there is a steady increase over time without periods of decline.
Social Atomization
The breakdown of social bonds between an individual and their community or society, leading to isolation or a feeling of disconnection.
Kitty Genovese
A New York woman whose 1964 murder became famous due to reports of bystander apathy, sparking research on what is now known as the bystander effect.
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