Key Corporation Distributes a Patent with an Indeterminable Value to Gary

question 62

Multiple Choice

Key Corporation distributes a patent with an indeterminable value to Gary as part of a plan of complete liquidation. In addition, Gary receives $40,000 cash and land with a $70,000 FMV and a $30,000 adjusted basis. Gary's basis in the Key stock (a capital asset) surrendered is $120,000. If Gary relies on the open transaction doctrine, at the liquidation date he must recognize a

• A)$0 gain.
• B)$10,000 capital loss.
• C)$30,000 capital loss.
• D)$70,000 capital gain.

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Definitions:

Flanges and Manifolds

Components used in piping systems; flanges connect pipes, valves, pumps, while manifolds distribute or collect fluids from multiple sources.

Thread Sealant

A chemical compound used to seal threaded joints and prevent leaks in plumbing, piping, or other threaded connections.

Countershaft Gear

A gear located on the countershaft in a gearbox, which engages with other gears to transmit power between the input and the output shafts.

Mainshaft Gear

A gear located on the mainshaft of a transmission, responsible for transmitting torque from the engine to the drive wheels at varying speeds.