Under a plan of complete liquidation, Coast Corporation distributes land with a $300,000 adjusted basis and a

Question:

Under a plan of complete liquidation, Coast Corporation distributes land with a $300,000 adjusted basis and a $400,000 FMV to William, a 25% shareholder. William has a $200,000basis in his Coast stock. The land is inventory in the hands of Coast Corporation. Coast Corporation must recognize.

a. No gain

b. $100,000 of ordinary income.

c. $100,000 of long-term capital gain.

d. $200,000 of ordinary income.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...