Rosalie owns 50% of the outstanding stock of Salmon Corporation. In a qualifying stock redemption, Salmon distributes $80,000 to Rosalie in exchange for one-half of her shares, which have a basis of $100,000.

Compute Rosalie's recognized loss, if any, on the redemption.

Question

Business

Cooper Koch

12 March, 06:47

Rosalie owns 50% of the outstanding stock of Salmon Corporation. In a qualifying stock redemption, Salmon distributes $80,000 to Rosalie in exchange for one-half of her shares, which have a basis of $100,000.

Compute Rosalie's recognized loss, if any, on the redemption.

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Allen Arroyo · Answer 1

Rosalie's recognized loss is $20,000.

Explanation:

Calculate the person R's recognized loss:

Person R's recognized loss = Amount distributed - Basis of share

= $80,000-$100,000

= $20,000

Therefore, person R's recognized loss is $20,000.

Person R's recognized loss is $20,000.

Rosalie owns 50% of the outstanding stock of Salmon Corporation. In a qualifying stock redemption, Salmon distributes $80,000 to Rosalie in exchange for one-half of her shares, which have a basis of $100,000.Compute Rosalie's recognized loss, if any, on the redemption.

Rosalie owns 50% of the outstanding stock of Salmon Corporation. In a qualifying stock redemption, Salmon distributes $80,000 to Rosalie in exchange for one-half of her shares, which have a basis of $100,000.

Compute Rosalie's recognized loss, if any, on the redemption.