For seven years, France Corporation has been owned entirely by Shawn and Megan, who are husband and wife. Shawn and Megan have a $167,000 basis in their jointly owned France stock. The France stock is Sec. 1244 stock. They receive the following assets in liquidation of their corporation: accountsreceivable, $20,000 FMV; a car, $18,000 FMV; office furniture, $2,000 FMV; and $6,000 cash.

Requirements

a.

What are the amount and character of their gain or loss?

b.

How would your answer change if the accounts receivable instead had a $144,000 FMV?

c.

What is the France's basis for each property received in the liquidation in Parts a and b?

Requirement a. What are the amount and character of their gain or loss?

Begin by computing the gain or loss recognized. Select the formula then enter the amounts and compute the gain or loss recognized. (Use a parentheses or minus sign for a loss. Abbreviations used: FMV=fair market value; BV=book value.)

What is the character of their gain or loss?

Enter the amounts and select the character of their gain or loss.

Requirement b. How would your answer change if the accounts receivable instead had a $144,000 FMV?

Compute the gain or loss recognized and select the character of the gain or loss.

Requirement c. What is the France's basis for each property received in the liquidation in Parts a and b? Select the property received in the liquidation and enter France's basis for each property received in the liquidation in Parts a and b.

Property Received	Part A	Part B
Cash
Accounts Receivable
Office Furniture
Car