The Stock in Toucan Corporation Is Held Equally by Two

question 34

Multiple Choice

The stock in Toucan Corporation is held equally by two brothers. Four years ago, the shareholders transfer property (basis of $200,000, fair market value of $220,000) to Toucan Corporation as a contribution to capital. In the current year and pursuant to a complete liquidation of Toucan, the property is distributed proportionately to the brothers. At the time of the distribution, the property had a fair market value of $40,000. What amount of loss will Toucan Corporation recognize on the distribution of the property?

• A) $0
• B) $20,000
• C) $160,000
• D) $180,000
• E) None of the above

---

Definitions:

Neurotransmitter

Chemical substances in the nervous system that transmit signals across synapses from one neuron to another.

Neurons

Specialized cells in the nervous system that transmit information to other nerve cells, muscle, or gland cells, playing a critical role in communication within the brain and throughout the body.

Diagonally Striped Pattern

A visual design featuring parallel stripes that slant diagonally across a surface.

Habituation

The process by which a person or animal becomes accustomed to a stimulus and responds less over time.