Brooks Corporation Distributes Property with a Basis of $20,000 and a Fair

question 44

Short Answer

Brooks Corporation distributes property with a basis of $20,000 and a fair market value of $25,000 to Caroline in complete liquidation of the corporation.Caroline's basis in the stock is $32,000.What must Caroline and Brooks report as income (loss)upon the liquidation of Brooks?
$\quad$ Caroline $\quad$$\quad$ Brooks
a. $\$ ( 12,000 ) \quad \$ ( 7,000 )$
b. $\$ ( 12,000 ) \quad \$ 5,000$
c. $\$ ( 12,000 ) \quad \$ - 0 -$
d. $\$ ( 7,000 ) \quad \$ 5,000$

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Definitions:

ABS Loop

A system configuration in anti-lock braking systems allowing for continuous monitoring and modulation of brake pressure to prevent wheel lockup.

Braking Force

The force applied to a vehicle's wheels to reduce speed or stop movement, typically generated by friction in brake systems.

Front Brakes

The brake system located on the front wheels of a vehicle, responsible for most of the vehicle's stopping power due to forward weight transfer during braking.

Modulated

Describes a process where the intensity, frequency, or amplitude of a signal is varied in a controlled manner, often for transmission.