Shrike Corporation Is Liquidated and Its Assets Are Distributed to Its

question 159

Multiple Choice

Shrike Corporation is liquidated and its assets are distributed to its 10 equal and unrelated individual shareholders.The assets distributed are as follows: One of the tax consequences of the liquidating distribution is:

• A) No gain or loss is recognized by Shrike Corporation.
• B) Shrike Corporation will recognize no loss on the securities, but must recognize a gain of $100,000 on the land.
• C) The shareholders will have a basis of $1,000,000 in the property they receive.
• D) The shareholders will have a basis of $1,100,000 in the property they receive.
• E) None of the above.

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