Olinto Corp., an accrual basis calendar year C corporation, had no corporate shareholders when it liquidated in

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Olinto Corp., an accrual basis calendar year C corporation, had no corporate shareholders when it liquidated in year 12. In cancellation of all their Olinto Corp. stock, each Olinto Corp. shareholder received in year 12 a liquidating distribution of $12,000 cash and land with a corporate tax basis of $15,000 and a fair market value of $20,500. Before the distribution, each shareholder’s tax basis in Olinto Corp. stock was $16,500. What amount of gain should each Olinto Corp. shareholder recognize on the liquidating distribution?
a.
$0
b. $10,500
c. $4,000
d. $16,000

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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South Western Federal Taxation 2020 Corporations, Partnerships, Estates And Trusts

ISBN: 9780357109168

43rd Edition

Authors: William A. Raabe, James C. Young, William H. Hoffman, Annette Nellen, David M. Maloney

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