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28 December, 08:10

Krol Corporation distributed marketable securities in redemption of its stock in a complete liquidation. On the date of distribution, these securities had a basis of $100,000 and a fair market value of $150,000. What gain does Krol have as a result of the distribution?

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  1. 28 December, 11:19
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    The answer is 50.000 dollars

    Explanation:

    When a corporation completely liquidates, the corporation wil recognize a gain or loss as if the property were sold at fair market value.

    Amount realizes as if sold $150,000

    Less: Adjusted basis $ 100,000.

    Equals: $50,000, which is the recognized capital gain.
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