Osprey Corporation stock is owned by Pedro and Pittro, who are unrelated. Pedro and Pittro each own 50% of the stock in the corporation. Osprey has the following assets (none of which were acquired in a § 351 or contribution to capital transaction) that are distributed in complete liquidation of the corporation. Fair Market Value Adjusted Basis Cash $390,200 $390,200 Land 234,120 Equipment 312,160 585,300 195,100 Assume that Osprey Corporation distributes the land to Pedro and the cash and equipment to Pittro. a. Determine Osprey's recognized gain or loss on the distribution of land. Osprey recognizes a of $ on the distribution of the land. b. Determine Osprey's recognized gain or loss on the distribution of the equipment. Osprey realizes à of $ on the equipment, of which $ is recognized.
Osprey Corporation stock is owned by Pedro and Pittro, who are unrelated. Pedro and Pittro each own 50% of the stock in the corporation. Osprey has the following assets (none of which were acquired in a § 351 or contribution to capital transaction) that are distributed in complete liquidation of the corporation. Fair Market Value Adjusted Basis Cash $390,200 $390,200 Land 234,120 Equipment 312,160 585,300 195,100 Assume that Osprey Corporation distributes the land to Pedro and the cash and equipment to Pittro. a. Determine Osprey's recognized gain or loss on the distribution of land. Osprey recognizes a of $ on the distribution of the land. b. Determine Osprey's recognized gain or loss on the distribution of the equipment. Osprey realizes à of $ on the equipment, of which $ is recognized.
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 14CE
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Transcribed Image Text:Osprey Corporation stock is owned by Pedro and Pittro, who are unrelated. Pedro and Pittro each own 50% of the stock in the corporation.
Osprey has the following assets (none of which were acquired in a § 351 or contribution to capital transaction) that are distributed in
complete liquidation of the corporation.
Fair Market
Value
Adjusted
Basis
Cash
$390,200
$390,200
Land
234,120
Equipment
312,160
585,300
195,100
Assume that Osprey Corporation distributes the land to Pedro and the cash and equipment to Pittro.
a. Determine Osprey's recognized gain or loss on the distribution of land.
Osprey recognizes a
of $
on the distribution of the land.
b. Determine Osprey's recognized gain or loss on the distribution of the equipment.
Osprey realizes à
of $
on the equipment, of which $
is recognized.
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