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:

Rectum

The final straight segment of the large intestine, ending at the anus, where feces are stored before elimination.

Constipation

A common digestive condition where an individual experiences difficulty in bowel movements or has infrequent stools, often leading to discomfort.

Enema

A medical procedure involving the introduction of liquids into the rectum and colon via the anus, often used for cleaning or medicinal purposes.

Colonoscopy

A diagnostic procedure that allows a doctor to examine the inner lining of the large intestine (colon) for abnormalities by using a long, flexible, tubular instrument called a colonoscope.