Finch Corporation Distributes Property (Basis of $225,000, Fair Market Value

question 29

Multiple Choice

Finch Corporation distributes property (basis of $225,000, fair market value of $300,000) to a shareholder in a distribution that is a qualifying stock redemption. The property is subject to a liability of $160,000, which the shareholder assumes. The basis of the property to the shareholder is:

• A) $0.
• B) $140,000.
• C) $225,000.
• D) $300,000.
• E) None of the above.

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Definitions:

Temporal Bone

A bone of the skull, located at the sides and base of the skull, and housing the structures of the ears.

Tarsal Bone

One of seven ankle bones.

Articulates

Relates to the manner in which joints connect between bones, allowing for movement and support in the skeletal system.

Greater Trochanters

The large, prominent protrusions located at the junction of the femur (thigh bone) and the hip bone.