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19 February, 20:38

Pursuant to a complete liquidation, Oriole Corporation distributes to its shareholders land held for three years as an investment (adjusted basis of $250,000, fair market value of $490,000). The land is subject to a liability of $520,000. What are the tax consequences to Oriole Corporation on the distribution of the land

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  1. 19 February, 21:07
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    A. $270,000

    B.$240,000

    Explanation:

    A.

    $520,000 - $250,000 = $270,000

    Therefore the tax consequences to Oriole Corporation on the distribution of the land is that Orile corporation will recognize a gain or profit of $270,000

    B. $ 490,000 - $250,000 = $240,000

    Therefore the tax consequences to Oriole Corporation on the distribution of the land is that Orile corporation will recognize a gain or profit of $240,000
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