Taxation of Business Entities: Chapter 6 Study Questions

May 26th, 2016
Studypool Tutor
Chabot College
Price: $5 USD

Tutor description

Chapter 6: Corporate Liquidating Distributions

Word Count: 5857
Showing Page: 1/14
TAXATION OF BUSINESS ENTITIES CHAPTER 6 QUIZANSWERS ARE HIGHLIGHTED1.A liquidating corporation could either (1) sell its assets and then distribute remaining cash to itsshareholders or (2) distribute its assets directly to the shareholders who then sell the distributedassets. Do the tax consequences of these alternatives differ?A.Yes, when a corporation sells its ssets and then distributes cash to its shareholders, the gain or loss flows through to theshareholders and the corporation recognizes no gain or loss. However, if assets are distributed directly to theshareholders, the corporation will recognize the gain or loss, not the shareholders.B.No, the results are normally the same unless the corporation is subject to loss limitation rules upon thedistribution of property to certain shareholders.C.No, the results are the same regardless of how a corporation distributes its liquidating assets.D.None of the above.2.Kelly Corporation makes a liquidating distribution. Among other property, it distributes land subject toa mortgage. The mortgage amount exceeds both the adjusted basis and FMV for the land. Explain toKelly Corporation's president how the amount of its recognized gain or loss on the distribution andthe shareholder's basis for the land are determined.A.Kelly Corporation's recognized gain or loss is the amount of mortgage released from the land. The shareholder's basis ofthe land is zero.B.Kelly Corporation's recognized gain is the amo

Review from student

Studypool Student
" Awesome! Exactly what I wanted. "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1821 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors