Purple Corporation Has Two Equal Shareholders, Joshua and Ellie, Who

question 33

Multiple Choice

Purple Corporation has two equal shareholders, Joshua and Ellie, who are father and daughter. One year ago, the two shareholders transferred properties to Purple in a § 351 exchange. Joshua transferred land (basis of $600,000, fair market value of $450,000) and securities (basis of $70,000, fair market value of $250,000) , while Ellie transferred equipment (basis of $420,000, fair market value of $700,000) . In the current year, Purple Corporation adopts a plan of liquidation, sells all of its assets, and distributes the proceeds pro rata to Joshua and Ellie. The only loss realized upon disposition of the properties was with respect to the land that had decreased in value to $310,000 and was sold for this amount. Purple never used the land for any business purpose during the time it was owned by the corporation. What amount of loss can Purple Corporation recognize on the sale of the land?

• A) $0
• B) $140,000
• C) $150,000
• D) $290,000
• E) None of the above

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Definitions:

Immigration Laws

Statutes, regulations, and legal precedents governing who may enter the country, the duration of their stay, and their legal duties and rights.

Incarceration Rate

The number of individuals held in prison or jail per 100,000 people in a particular population.

Imprisonment Rate

The number of individuals incarcerated in a country's prison system per 100,000 of the population.

Immigrant Population

Refers to the group of people who have moved to a country from another country to live permanently.