Need answers to all posted MCQ. No need for explanations. Only attempt if you will answer all posted questions.

25. Bob created MNO Inc. several years ago and has owned all 10 outstanding shares of MNO Inc. since the creation of MNO Inc. The fair market value of those shares is now $50,000. Bobs friend, Lee, owns a building having a fair market value of $80,000 and an adjusted basis to Lee of $20,000. The building is encumbered by a $30,000 mortgage. Earlier this month, Bob and Lee discussed Lees becoming involved in the business of MNO Inc., and as a result of these discussions, Lee transferred the building to MNO Inc. and in exchange for the building, MNO Inc. transferred to Lee 10 shares of authorized but not previously issued stock of MNO Inc. After the transaction there were 20 shares of stock issued and outstanding. How much gain was realized and recognized by Lee as a result of this transaction?

a. $30,000 of gain was realized and recognized.

b. $30,000 of gain was realized,0 of which was recognized.

c. $60,000 of gain was realized, $10,000 of which was recognized.

d. $60,000 of gain was realized and recognized.

26. Al owned all of the outstanding stock of ABC Corporation. Al transferred a building, cash, and IBM stock to ABC Corporation. The adjusted basis and the fair market value of the assets transferred to ABC Corporation, and the amount remaining on the mortgage on the building transferred, were as follows. A building was transferred by Al to ABC Corporation that had an adjusted basis to Al of $20,000, a fair market value of $50,000, and a mortgage of $40,000, that was assumed by the corporation, cash in the amount of $10,000 was transferred, and IBM stock with an adjusted basis to Al of $15,000 and a fair market value of $12,000. In exchange for the assets transferred to ABC Corporation, Al received additional stock of ABC Corporation. How much gain did Al recognize as a result of this transaction?

a. 0.

b. $10,000.

c. $20,000.

d. $27,000.

27. ABC Inc. had current earnings and profits of $50,000 on June 2, 2016 when it made a nonliquidating distribution to an individual shareholder of land that the corporation held for several years as an investment. On the date the land was distributed, ABC Inc.s adjusted basis in the land was $10,000, the fair market value of the land was $50,000, and the land was encumbered by a $30,000 mortgage. The liability was assumed by the shareholder. There were no other transactions that might affect ABC Inc.s earnings and profits for the year. What was the amount of ABC Inc.s earning and profits at the end of the year?

a. $30,000.

b. $50,000.

c. $60,000.

d. $70,000.

e. none of the above.

28. EFG Inc. distributed land to an individual shareholder in a nonliquidating distribution. On the date the land was distributed, EFG Inc.s adjusted basis in the land was $20,000, the fair market value of the land was $75,000, and the land was encumbered by a $35,000 mortgage, which liability was assumed by the shareholder. The corporations earnings and profits were $245,000 on the last day of the year in which the distribution without taking into effect any impact of the distribution on the corporations earnings and profits. As a result of the distribution, how much is the amount of dividend income to the shareholder, and what is the shareholders basis in the distributed property?

a. Dividend income of $20,000 and basis of $20,000.

b. Dividend income of $40,000 and basis of $20,000.

c. Dividend income of $40,000 and basis of $40,000.

d. Dividend income of $40,000 and basis of $75,000.

29. XYZ Corporation had one shareholder. Pursuant to a plan of liquidation, XYZ Corporation distributed land to its sole shareholder, Jane, as a liquidating distribution. At the time of the distribution, the land had a fair market value of $120,000 and XYZ Corporations adjusted basis in the land was $100,000. The land was encumbered by a $140,000 mortgage, and the mortgage was assumed by the shareholder. How much gain did XYZ Corporation recognize as a result of the distribution?

a. 0.

b. $20,000.

c. $40,000.

d. $100,000.

30. Pursuant to a plan of liquidation, Tom received a liquidating distribution from Furniture Corporation as part of the redemption of all of the Furniture Corporations stock and the complete liquidation of Furniture Corporation. Toms basis for his ABC Corporation stock was $10,000. In exchange for his stock, Tom received a payment of $15,000 and property that had an adjusted basis to Furniture Corporation of $10,000, a fair market value of $25,000, and that was encumbered by a $12,000 mortgage which Tom assumed. How much gain did Tom recognize as a result of this transaction?

a. $3,000.

b. $18,000.

c. $30,000.

d. $42,000.

e. None of the above.

31. The stock of Strength Corp. is owned equally by two sisters. During 2010, they transferred land (which had a basis of $300,000 and a fair market value of $320,000) as a contribution to capital of Strength Corp. During April of 2016, Strength Corp. adopted a plan of complete liquidation and in June 2016 pursuant to the plan of liquidation made a pro rata distribution of land back to the sisters. At the time of the liquidating distribution, the land had a fair market value of $180,000. What amount of loss is allowable to Strength recognized Corp. with respect to the distribution of land?

a. $0.

b. $20,000.

d. $120,000.

d. $140,000.

e. We do not have sufficient information.

32. Corporate dividends are paid

a. at the discretion of the board of directors.

b. when theres plenty of money to do so.

c. at least every six months.

d. upon demand by a majority of shareholders entitled to vote.

33. Large Corp. decides to buy all of the assets of Modest Corp.

a. approval by the majority of shareholders of both corporations will be necessary to complete the transaction.

b. approval by the majority of shareholders only of Modest Corp. will be necessary to complete the transaction.

c. Large Corp. must assume all the liabilities of Modest Corp. when Large Corp. purchases all of the assets of Modest.

d. The U.S. Justice Departments approval is always required to avoid anti-trust claims.