The Stock of Loon Corporation Is Held as Follows: 85

question 26

Multiple Choice

The stock of Loon Corporation is held as follows: 85% by Duck Corporation and 15% by Gerald, an individual. Loon Corporation is liquidated in December of the current year, pursuant to a plan adopted earlier in the year. Loon Corporation distributes land with a basis of $350,000 and fair market value of $390,000 to Gerald in liquidation of his stock interest. Gerald had a basis of $200,000 in his Loon stock. How much gain will Loon Corporation recognize in this liquidating distribution?

• A) $0
• B) $40,000
• C) $190,000
• D) $390,000
• E) None of the above

---

Definitions:

Balanced Scorecard

A management and planning system designed to align a company's operations with its vision and strategic objectives, enhance communication both internally and externally, and track the performance of the organization in relation to its strategic targets.

Lean Management System

An approach focused on reducing waste and improving process efficiency to deliver value to customers.

Performance Metrics

Quantitative and qualitative measurements used to gauge an organization's, employee's, system's, or component's performance.

Strategic Objectives

The specific goals that an organization aims to achieve, aligning with its overall strategic plan and guiding its operational activities.