Robin Corporation Distributes Equipment (Basis of $80,000 and Fair Market

question 133

Multiple Choice

Robin Corporation distributes equipment (basis of $80,000 and fair market value of $100,000) as a property dividend to its shareholders.The equipment is subject to a liability of $110,000.Robin Corporation recognizes gain of:

• A)$0.
• B)$20,000.
• C)$30,000.
• D)$110,000.
• E)None of the above.

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Definitions:

Fire Screens

Protective screens placed in front of fireplaces to prevent sparks and embers from escaping into the room.

Retail Values

The total price at which goods or services are sold to the public, inclusive of any markup costs.

Inventory Value

The total cost or market value of all the goods and materials held by a company for the purpose of resale or production.

Electric Items

Devices or appliances that operate using electrical power, ranging from household electronics to industrial machinery.