Question
Achievement Corp has 2 unrelated shareholders including Curly who owns 40% with a stock basis of $300,000, and Phoenix who owns 60%. Achievement Corporation engages
Achievement Corp has 2 unrelated shareholders including Curly who owns 40% with a stock basis of $300,000, and Phoenix who owns 60%. Achievement Corporation engages in a complete liquidation by distributing cash to Phoenix, and the following asset to Curly.
Description | FMV | Adjusted Basis | Notes |
Equipment | 360,000 | 600,000 | Distributed to Curly (40% owner) Purchased 3-years ago for use in the business for $700,000 (100,000 of depreciation taken) |
- What amount of gain or loss does Curly recognize and what is the character of the gain or loss?
- What amount of gain or loss does Achievement Corp recognize and what is the character of the gain or loss?
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Intermediate Accounting
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
10th Edition
324300980, 978-0324300987
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