Global Corporation Distributes Property with a Basis of $22,000 and a Fair

question 84

Multiple Choice

Global Corporation distributes property with a basis of $22,000 and a fair market value of $30,000 to Arturo in complete liquidation of the corporation.Arturo's basis in the stock is $14,000.What must Arturo and Global report as income upon the liquidation of Global?
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Arturo Global

• A)$16,000 $8,000
• B)$16,000 $-0-
• C)$30,000 $-0-
• D)$30,000 $30,000

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Definitions:

Artificial Time Periods

Divisions of time, not naturally occurring, created for the purpose of financial reporting, budgeting, or project scheduling.

Economic Entity Assumption

An accounting principle that treats a company as a separate entity from its owners or shareholders for financial reporting purposes.

Economic Events

Transactions and occurrences that have a direct impact on the financial position and performance of a company, including both internal and external activities.

Sole Proprietorship

A business structure where an individual owns the company and is personally responsible for its debts.