Ask Question
27 April, 17:30

Lake City Corporation owns all the stock in Columbia Corporation. Pursuant to a plan of complete liquidation, Columbia distributes land having a $500,000 FMV and a $200,000 basis to Lake City. Columbia's gain with respect to the distribution will be

+4
Answers (1)
  1. 27 April, 17:50
    0
    Since on distribution on complete liquidation to shareholder will taxable on both hand (company and shareholdeR). shareholder will pay tax on FMVless adjusted basis and corporate will pay tax on gain (FMV-adjusted basis of asset).

    since taxability in both hands will result in double taxation, any gain/loss will be taxed in shareholders hand and corporate tax liability will be minimal'

    so correct option is "D" - no gain recognised.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Lake City Corporation owns all the stock in Columbia Corporation. Pursuant to a plan of complete liquidation, Columbia distributes land ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers