Questions from Federal Taxation

Q: Cable Corporation, which operates a fleet of motorized trolley cars in

Cable Corporation, which operates a fleet of motorized trolley cars in a resort city, is undergoing a complete liquidation. John, who owns 80% of the Cable stock, plans to continue the business in ano...

Q: For three years, Diamond Corporation has been owned equally by Arlene

For three years, Diamond Corporation has been owned equally by Arlene and Billy. Arlene and Billy have $40,000 and $20,000 adjusted bases, respectively, in their Diamond stock. Arlene receives a $30,0...

Q: Meridian Corporation originally was owned equally by five individual shareholders. Four

Meridian Corporation originally was owned equally by five individual shareholders. Four years ago, Meridian adopted a plan of liquidation, and each shareholder received a liquidating distribution. Tin...

Q: For seven years, Monaco Corporation has been owned entirely by Stacy

For seven years, Monaco Corporation has been owned entirely by Stacy and Monique, who are husband and wife. Stacy and Monique have a $165,000 basis in their jointly owned Monaco stock. The Monaco stoc...

Q: Peter owns 25% of Crosstown Corporation stock in which he has

Peter owns 25% of Crosstown Corporation stock in which he has a $200,000 adjusted basis. In each of the following situations, what amount of gain/loss will Peter report in the current year? In the nex...

Q: Len Wallace contributed assets with a $100,000 adjusted basis

Len Wallace contributed assets with a $100,000 adjusted basis and a $400,000 FMV to Ace Corporation in exchange for all of its single class of stock. The corporation conducted operations for five year...

Q: What are the amount and character of the gain or loss recognized

What are the amount and character of the gain or loss recognized by the distributing corporation when making liquidating distributions in the following situations? What is the shareholder’s basis for...

Q: Sam and Veronica own 300 and 200 shares, respectively, of

Sam and Veronica own 300 and 200 shares, respectively, of PolyElectron Corporation stock, which represent all the shares outstanding. The current market value per share is $25. Poly-Electron needs cap...

Q: Melon Corporation, which is owned equally by four individual shareholders,

Melon Corporation, which is owned equally by four individual shareholders, adopts a plan of liquidation for distributing the following property: • Land (a capital asset) having a $30,000 FMV and a $1...

Q: Titan Corporation adopts a plan of liquidation. It distributes an apartment

Titan Corporation adopts a plan of liquidation. It distributes an apartment building having a $3 million FMV and a $1.8 million adjusted basis, and land having a $1 million FMV and a $600,000 adjusted...