In the current year, Dove Corporation (E & P of $1,000,000) distributes all of its property in a complete liquidation. Alexandra, a shareholder, receives land having a fair market value of $185,000. Dove Corporation had purchased the land as an investment three years ago for $115,000, and the land was distributed subject to a $75,000 liability. Alexandra took the land subject to the $75,000 liability. What is her basis in the land? a. $115,000 b. $185,000 c. $0 d. $110,000
In the current year, Dove Corporation (E & P of $1,000,000) distributes all of its property in a complete liquidation. Alexandra, a shareholder, receives land having a fair market value of $185,000. Dove Corporation had purchased the land as an investment three years ago for $115,000, and the land was distributed subject to a $75,000 liability. Alexandra took the land subject to the $75,000 liability. What is her basis in the land? a. $115,000 b. $185,000 c. $0 d. $110,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In the current year, Dove Corporation (E & P of $1,000,000) distributes all of its property in a complete liquidation. Alexandra, a shareholder, receives land having a fair market value of $185,000. Dove Corporation had purchased the land as an investment three years ago for $115,000, and the land was distributed subject to a $75,000 liability. Alexandra took the land subject to the $75,000 liability. What is her basis in the land?
a. $115,000
b. $185,000
c. $0
d. $110,000
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