During 2017, Track Corporation Distributes Property to Cindy as Part

question 64

Multiple Choice

During 2017, Track Corporation distributes property to Cindy as part of a complete liquidation. Property included in the distribution is $30,000 in cash, land with a $40,000 adjusted basis and a $60,000 FMV, and a copyright without an ascertainable FMV and having a zero basis. The first payment to Cindy of $8,000 for use of the copyrighted property occurs in 2018. Cindy has a basis in the Track stock of $95,000 immediately preceding the liquidation. The minimum amount of gain that Cindy must recognize is a

• A)$3,000 gain in 2018.
• B)$0 gain in 2017.
• C)$3,000 gain in 2017, which is reported on an amended current-year tax return that is filed in 2018.
• D)none of the above

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Definitions:

Analysis of Variance (ANOVA)

A statistical method used to test the difference between two or more means by analyzing variances.

T-test

A statistical test used to compare the mean of a sample to a known value, or the means of two samples, to assess if the differences are statistically significant.

Regression Analysis

The statistical process for estimating the relationships among variables, often used to predict a dependent variable from one or more independent variables.

Indicator Variables

Variables in statistics used to represent categorical data with values indicating the presence or absence of a characteristic.