The Stock in Toucan Corporation Is Held Equally by Two

question 34

Multiple Choice

The stock in Toucan Corporation is held equally by two brothers. Four years ago, the shareholders transfer property (basis of $200,000, fair market value of $220,000) to Toucan Corporation as a contribution to capital. In the current year and pursuant to a complete liquidation of Toucan, the property is distributed proportionately to the brothers. At the time of the distribution, the property had a fair market value of $40,000. What amount of loss will Toucan Corporation recognize on the distribution of the property?

• A) $0
• B) $20,000
• C) $160,000
• D) $180,000
• E) None of the above

---

Definitions:

United States

A country located in North America, known for its diverse population and significant impact on global politics, economy, and culture.

Ambiguous Terms

Words or phrases that lack specificity and can be understood in more than one way, often leading to confusion or misinterpretation.

Semantics

The study of the meaning and changes in the meaning of words or symbols.

Verbal Communication

The process of sharing information between individuals through the use of speech.