Formed in 1999,Purple Corporation Has Two Equal Shareholders,Joshua and Ellie,who

question 55

Multiple Choice

Formed in 1999,Purple Corporation has two equal shareholders,Joshua and Ellie,who are father and daughter.In 2007,the two shareholders transfer properties to Purple in a § 351 exchange.Joshua transferred undeveloped land (basis of $150,000,fair market value of $100,000) and securities (basis of $25,000,fair market value of $100,000) ,while Ellie transferred equipment (basis of $120,000,fair market value of $200,000) .Purple Corporation adopts a plan of liquidation in 2008,sells all of its assets,and distributes the proceeds pro rata to Joshua and Ellie.The only loss realized upon disposition of the properties was with respect to the undeveloped land that had decreased in value to $50,000 and was sold for this amount.Purple never used the land for any business purpose during the time it was owned by the corporation.What amount of loss can Purple Corporation recognize on the sale of the undeveloped land?

• A)$0.
• B)$25,000.
• C)$50,000.
• D)$100,000.
• E)None of the above.

---

Definitions:

Mouth Corners

The outer points of the mouth where the upper and lower lips meet.

Brows Level

Refers to the position or expression of the eyebrows, often used in context of facial expressions or beauty standards.

Cognitive Appraisals

The mental process of interpreting and making sense of a situation or event, especially in relation to one's well-being.

Emotional Influence

The impact of one's emotions on their cognitive processes and behaviors, including decision-making and interpersonal interactions.