Texas Corporation Is Undergoing a Complete Liquidation and Distributes Land

question 11

Multiple Choice

Texas Corporation is undergoing a complete liquidation and distributes land to Robert, one of its shareholders, in exchange for all of Robert's stock. The land has a basis of $300,000 and an FMV of $400,000 on Texas Corporation's books and is subject to a $325,000 liability. Robert assumes the liability on the property. Robert's basis in his Texas Corporation stock is $100,000. What is the amount of gain or loss recognized by Robert on the distribution?

• A)$175,000 gain
• B)$25,000 gain
• C)$25,000 loss
• D)No gain or loss is recognized.

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Definitions:

Eukaryotic Cell Division

Processes, including mitosis and meiosis, through which eukaryotic cells divide, ensuring accurate distribution of chromosomes to daughter cells.

Ribosomes

Cellular structures responsible for protein synthesis, reading mRNA sequences to assemble amino acids into polypeptides.

Protein Synthesis

The cellular process of building proteins from amino acids based on the instructions coded in DNA and mediated by RNA.

Microfilament

Cytoskeletal element composed of actin subunits; reinforces cell membranes; functions in movement and muscle contraction.