Goose Corporation has a basis of $3,340,000 in the stock of Swift Corporation, a wholly owned subsidiary acquired 30 years ago.

Question

3 years ago

6

Goose Corporation has a basis of $3,340,000 in the stock of Swift Corporation, a wholly owned subsidiary acquired 30 years ago.

Goose liquidates Swift Corporation and receives assets that are worth $2,672,000 and have a basis to Swift of $2,338,000.
Required:
a. Determine Goose Corporation’s recognized gain or loss on the liquidation.
b. Determine Goose Corporation’s basis in the assets received in liquidation.

Business

1 answer:

pentagon [3] · Answer 1 · 2022-07-01T02:05:35+03:00

Answer:

A. No gain or loss

B. Carryover; $2,338,000

Explanation:

A. Based on the information given the Corporation’s RECOGNIZED NO GAIN OR LOSS on the liquidation reason been that under SECTION 332 GOOSE'S BASIS IN THE SWIFT STOCK OF THE AMOUNT OF $3,340,000 IS REDUCED TO ZERO AMOUNT.

B. Based on the information given the Corporation’s BASIS IN THE ASSETS RECEIVED IN LIQUIDATION will be CARRYOVER BASIS of the amount of $2,338,000.