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bazaltina [42]
3 years ago
12

Riverwalk Corporation is liquidated, with Juan receiving $5,000 in money, other property having a $6,000 FMV, and a $1,000 mortg

age on the property. Juan's basis in his River walk stock is $8,000. Upon liquidation, Juan must recognize a gain of:_______.A) 0.B) $2,000.C) $3,000.D) $11,000.
Business
2 answers:
Lemur [1.5K]3 years ago
7 0

Answer:

B) $2,000.

Explanation:

Juan's gain/loss = net distribution - basis

  • net distribution = $5,000 (cash) + $6,000 (property) - $1,000 (mortgage) = $10,000
  • basis = $8,000

Juan's gain = $10,000 - $8,000 = $2,000

Even if Juan had previously transferred the property in a Section 351 exchange, he would still have to recognize a gain because the liquidation included other assets. If the liquidation had only included the land (e.g. FMV $11,000) and two years would have passed since the original Section 351 transfer, then Juan wouldn't have needed to pay taxes.

7nadin3 [17]3 years ago
5 0

Answer:

The correct option is B,$2000

Explanation:

The gain on the cash and property received by Juan can be computed thus:

Cash received                      $5,000

Property less mortgage:

Property value  $6000

Mortgage          ($1000)         $5000

Total                                        $10,000

less stock basis                       ($8,000)

gain on stock                           $2,000

Option A is since the value of cash and property received is not $8,000 which gives a no gain  no loss outcome.

Option C is wrong since the property mortgage of $1000 must be deducted from the property before computing the gain or loss.

Option D is obviously wrong as the $11,000 is just the summation of property value of $6000 without considering mortgage and the cash received.

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Answer:

The summary of the matter in question is mentioned throughout the subsection below.

Explanation:

  • Venture Capital seems to be an age-old term although in previous centuries this same industry has changed.
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statuscvo [17]

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The capitalized cost of any investment can be determined using the equation, P = A/i.  Where P is the capitalized cost, A is the annual amount and i is the interest rate.

7 0
2 years ago
Melissa is a self-employed lawyer who chooses a higher-priced restaurant 2 miles from home over a cheaper restaurant 15 miles fr
kiruha [24]

Answer:

Option (E) is correct.

Explanation:

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But Melissa chooses the first one by comparing the opportunity cost associated with each option relative to the other option.

This is because of the higher opportunity cost associated with second restaurant offsets the higher monetary cost of the first restaurant.

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Answer:

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Under such a scenario, <em>the development of brownfields in urban areas is the result of building more department complexes in the cities because of the increasing need for renting and selling houses as a result of the increasing population growth.</em>

5 0
3 years ago
Read 2 more answers
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