The Stock of Cardinal Corporation Is Held as Follows: 90

question 22

Multiple Choice

The stock of Cardinal Corporation is held as follows: 90% by Blue Jay Corporation (basis of $500,000) and 10% by Samuel (basis of $70,000) .Cardinal Corporation is liquidated in October of the current year, pursuant to a plan adopted earlier in the year.Pursuant to the liquidation, Cardinal Corporation distributed Asset A (basis of $450,000, fair market value of $720,000) to Blue Jay, and Asset B (basis of $45,000, fair market value of $80,000) to Samuel.No election is made under § 338.With respect to the liquidation of Cardinal:

• A)Cardinal Corporation recognizes a gain of $35,000.
• B)Blue Jay has a basis in Asset A of $720,000.
• C)Samuel recognizes no gain (or loss).
• D)Blue Jay recognizes a gain of $220,000.
• E)None of the above.

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Definitions:

Myocardial Infarction

A medical condition commonly known as a heart attack, caused by the interruption of blood flow to a part of the heart.

Smokers

Individuals who inhale smoke from combustible tobacco products, such as cigarettes or cigars, into their lungs.

Population Attributable Risk

The proportion of disease cases in the entire population that can be attributed to a particular risk factor.

Exposure

The state of being subjected to some effect or influence, often used in context of exposure to diseases, chemicals, or other risk factors.