XYZ Corporation has a basis of $1,200,000 in the stock of ABC Corporation, a wholly owned subsidiary acquired several years ago. XYZ liquidates ABC Corporation and receives assets that are worth $1,000,000 and have a basis to ABC of $850,000. Determine XYZ Corporation’s recognized gain or loss on the liquidation. Determine XYZ Corporation’s basis in the assets received in liquidation.

XYZ Corporation has a basis of $1,200,000 in the stock of ABC Corporation, a wholly owned subsidiary acquired several years ago. XYZ liquidates ABC Corporation and receives assets that are worth $1,000,000 and have a basis to ABC of $850,000. Determine XYZ Corporation’s recognized gain or loss on the liquidation. Determine XYZ Corporation’s basis in the assets received in liquidation.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter6: Corporations: Redemptions And Liquidations

Section: Chapter Questions

Problem 63P

See similar textbooks

Similar questions

Goose Corporation has a basis of $2,400,000 in the stock of Swift Corporation, a wholly owned subsidiary acquired 30 years ago. Goose liquidates Swift Corporation and receives assets that are worth $2,000,000 and have a basis to Swift of $1,700,000. a. Determine Goose Corporation’s recognized gain or loss on the liquidation. b. Determine Goose Corporation’s basis in the assets received in liquidation.
Pursuant to a complete liquidation, Carl Corporation distributes to its shareholders real estate held as an investment (basis of $650,000, fair market value of $775,000). a. Compute the gain or loss recognized by Carl Corporation on the distribution if no liability is involved. b. Compute the gain or loss recognized by Carl Corporation on the distribution if the real estate is subject to a liability of $700,000. c. Compute the gain or loss recognized by Carl Corporation on the distribution if the real estate is subject to a liability of $895,000.
Goose Corporation has a basis of $7,645,000 in the stock of Swift Corporation, a wholly owned subsidiary acquired 30 years ago. Goose liquidates Swift Corporation and receives assets that are worth $6,116,000 and have a basis to Swift of $ 5,351,500. If an amount is zero or there is no gain or loss, enter "0". a. Determine Goose Corporation's recognized gain or loss on the liquidation. Goose recognizes of: . As a result, Goose's basis in the Swift stock is now s b. Determine Goose Corporation's basis in the assets received in liquidation. Goose Corporation has a basis of $ in the assets received in liquidation.
Pursuant to a complete liquidation, Carrot Corporation distributes to its shareholders real estate held as an investment (basis of $1,066,000, fair market value of $1,385,800). a. Determine the gain or loss recognized by Carrot on the distribution if no liability is involved. If no liability is involved, Carrot has a recognized of $ on the distribution. b. Determine the gain or loss recognized by Carrot on the distribution if the real estate is subject to a liability of $1,172,600. If the real estate is subject to a liability of $1,172,600, Carrot has a recognized of $ C. Determine the gain or loss recognized by Carrot on the distribution if the real estate is subject to a liability of $1,492,400. If the liability were $1,492,400, Carrot's recognized on the distribution would be
Blue Corp. purchased 100% of the stock of Magenta Corp. in 1984 for $300,000. Early this year, Magenta was liquidated. Blue Corp. received all of Magenta’s assets, which had a basis to Magenta Corp. of $420,000 and a FMV of $440,000. Assume the requirements of §332 were satisfied. What about of gain will Blue Corp. recognize any gain as a result of the liquidation?
Green Corporation's assets are valued at $1,407,500 after payment of all corporate debts, except for $211,125 of taxes payable on net gains it recognized on the liquidation. Bruno, an individual and the sole shareholder of Green, has a basis of $73,894 in his stock. Compute the gain or loss recognized by Bruno on the liquidation of Green Corporation. Bruno has a recognized of $fill in the blank 2 as a result of the liquidation.
During the liquidation, the sale of all the assets of liquidated corporation resulted to net proceeds of P500,000. Liquidation expense amounting to P30,000 has been paid at the start of liquidation from the net proceeds of disposal of all assets. Before the liquidation, the following data are provided concerning the financial position of the said financially distressed corporation:• The corporation has total assets with book value of P1,000,000 and deficiency amounting to(P170,000.)• An investment property with book value of P250,000 and realizable value of P150,000 secured a loanpayable amounting to P50,000.• Inventory with book value of P500,000 and realizable value of P50,000 secured a note payableamounting to P100.000• Salaries payable and come tax payable amounted to P50,000 and 20,000. respectively. What is the amount received by partially secured creditor?
Sub Corporation is a wholly owned subsidiary of Parent Corporation. Sub Corp has three assets: Cash $20,000; Inventory FMV $200,000, AB $140,000; Land FMV $180,000, AB $210,000. Sub adopts a formal plan of liquidation and immediately thereafter distributes its assets to Parent. Parent's adjusted basis in its Sub Corporation stock was equal to $285,000. Parent had acquired Sub Corporation six years prior to the liquidation. What are the tax consequences of this liquidation to Parent Corp and Sub Corp? Sub Corporation is owned 95% by Parent Corporation and 5% by Brian an unrelated person. Sub Corp has three assets: Equipment FMV $20,000, AB $6,000; Inventory FMV $200,000, AB $140,000; Land FMV $180,000, AB $210,000. Sub adopts a formal plan of liquidation and immediately thereafter distributes its assets to Parent. Parent's adjusted basis in its Sub Corporation stock was equal to $285,000 and Brian's adjusted basis in his Sub stock was equal to $13,500. Parent Corp and Brian had acquired…
Under its plan of liquidation, Better Corp will distribute all of its assets to its sole shareholder, Barry. The assets have a FMV of $50,000 and an adjusted basis of $14,000. Barry's basis in Corp stock is $6,500. What is the gain that Better Corp will realize upon liquidation? What is the gain that Barry will realize upon liquidation?
In a qualifying reorganization, Cato Corporation exchanges $1,200,000 worth of stock and property valued at $500,000 ($245,000 basis) for all of Firestar Cor- poration’s assets, which have a value of $1,700,000 and a $500,000 basis. Firestar dis- tributes the property received from Cato. The exchange meets the § 368 requirements. What is Cato’s recognized gain/loss from the reorganization? What is Firestar’s recognized gain/loss from the reorganization?
On November 8, 2023, Power Corp. sold land to Wood Co., its wholly owned subsidiary. The land cost $62,000 and was sold to Wood for $74,000. For consolidated financial statement reporting purposes, when must the gain on the sale of the land be recognized? O Proportionately over a designated period of years. O No gain may be recognized. O When Wood Co. sells the land to a third party. O As Wood uses the land.
Reyes Corp. owned 70% of the voting common stock of Lee Co. During 2021, Lee sold a parcel of land to Reyes. The land had a book value of $87,000 and was sold to Reyes for $138,000. Lee's reported net income for 2021 was $127,000. Required: Assuming there are no other intra-entity transactions nor excess amortizations, what was the net income attributable to the noncontrolling interest of Lee? Due to the sale of land being an upstream sale, and not sold to an external entity the Gain would be deferred each year.