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:

Protective Factor

An aspect of an individual's environment or personality that reduces their vulnerability to negative psychological or physical outcomes.

Obsessive-Compulsive Disorder

A mental disorder characterized by unwanted repetitive thoughts (obsessions) and actions (compulsions).

Repetitive

Characterized by repeating the same action or event over and over again.

Intrusive

Unwanted and often recurrent thoughts, images, or impulses that invade an individual's consciousness, typically causing significant distress.