The Stock of Cardinal Corporation Is Held as Follows: 90

question 40

Multiple Choice

The stock of Cardinal Corporation is held as follows: 90% by Blue Jay Corporation (basis of $500,000) and 10% by Samuel (basis of $70,000) .Cardinal Corporation is liquidated on October 20,2010,pursuant to a plan adopted on January 8,2010.Pursuant to the liquidation,Cardinal Corporation distributed Asset A (basis of $450,000,fair market value of $720,000) to Blue Jay,and Asset B (basis of $45,000,fair market value of $80,000) to Samuel.No election is made under § 338.With respect to the liquidation of Cardinal:

• A)Samuel recognizes no gain (or loss).
• B)Blue Jay has a basis in Asset A of $720,000.
• C)Cardinal Corporation recognizes a gain of $35,000.
• D)Blue Jay recognizes a gain of $220,000.
• E)None of the above.

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Definitions:

PET

Positron Emission Tomography, a type of imaging test that allows doctors to check for diseases in the body by using a special dye containing radioactive tracers.

fMRI

Functional Magnetic Resonance Imaging, a neuroimaging technique that measures brain activity by detecting changes associated with blood flow.

Control Groups

Groups in experiments that do not receive the experimental treatment, allowing researchers to assess the treatment's effect by comparing it against this baseline.

Experimental Groups

Groups in an experiment that receive the treatment or variable being tested, allowing researchers to assess its effects.