The Stock of Lavender Corporation Is Held as Follows: 80

question 4

Multiple Choice

The stock of Lavender Corporation is held as follows: 80% by Jade Corporation (basis of $400,000) and 20% by Tiffany (basis of $100,000) . Lavender Corporation is liquidated in December of the current year, pursuant to a plan adopted earlier in the year. Pursuant to the liquidation, Lavender Corporation distributed Asset A (basis of $600,000, fair market value of $900,000) to Jade, and Asset B (basis of $250,000, fair market value of $225,000) to Tiffany. No election is made under § 338. With respect to the liquidation of Lavender:

• A) Lavender recognizes a loss of $25,000 on the distribution of Asset B.
• B) Jade has a basis in Asset A of $900,000.
• C) Tiffany has a basis in Asset B of $225,000.
• D) Jade recognizes a gain of $500,000.
• E) Lavender recognizes a gain of $300,000 on the distribution of Asset A.

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Definitions:

Allostatic Load

The physiological wear and tear on the body that results from ongoing adaptive efforts to maintain stability (homeostasis) in response to stressors.

Present Experience

The immediate perception of events happening at the current moment, involving a focus on the here and now.

Mindfulness

Paying attention on purpose in the present moment with attitudes of curiosity, patience, nonjudgement and openness.

Negative Affectivity

The state or trait tendency to experience nervousness, fear, anger, sadness, contempt, or guilt.