A Corporation Distributes Land with a FMV of $85,000 (Basis

question 19

Multiple Choice

A corporation distributes land with a FMV of $85,000 (basis $50,000) .The land has a mortgage of $95,000 assumed by the shareholder.Gain to the corporation is

• A)$0.
• B)$10,000.
• C)$35,000.
• D)$45,000.

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Definitions:

Retirement

The process of removing an asset from service after its useful life has ended, often involving its disposal or sale.

Gain or Loss

The financial result from a transaction that leads to an increase (gain) or decrease (loss) in the asset value of a company.

Straight-line Amortization

A method of evenly spreading out the cost of an intangible asset over its useful life.

Interest Payment

The amount paid at regular intervals (often annually or semi-annually) on a debt instrument such as a bond or loan, based on the interest rate and the principal amount.