Question
Jon, Ellyn and Rori each own 100 shares of JER Corporation. JER adopts a plan of complete liquidation. JER distributes $100,000 of cash to Jon;
Jon, Ellyn and Rori each own 100 shares of JER Corporation. JER adopts a plan of complete liquidation. JER distributes $100,000 of cash to Jon; a capital asset with a fair market value of $100,000 and a tax basis $120,000 to Ellyn; inventory with a fair market value of $100,000 and tax basis of $70,000 to Rori. What gain and/or loss does JER recognize on these distributions ?
A.capital loss $20,000
B.ordinary income $30,000
C.No gain or loss
D.capital loss $20,000 and ordinary income $30,000
m statement, appropriate input type, and other instructions here.
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