The Trap Corp. liquidates two shareholders, each owned 40% of the stock receives for the stock, machine worth $90,000 with a basis of $70,000 and warehouse worth $50,000 with a basis of $20,000. Trap Corp. will recognize? A. $50,000 of sec 1231 gain B. $50,000 of capital gain C. $50,000 of ordinary i
The Trap Corp. liquidates two shareholders, each owned 40% of the stock receives for the stock, machine worth $90,000 with a basis of $70,000 and warehouse worth $50,000 with a basis of $20,000. Trap Corp. will recognize? A. $50,000 of sec 1231 gain B. $50,000 of capital gain C. $50,000 of ordinary i
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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1.) The Trap Corp. liquidates two shareholders, each owned 40% of the stock receives for the stock, machine worth $90,000 with a basis of $70,000 and warehouse worth $50,000 with a basis of $20,000. Trap Corp. will recognize?
A. $50,000 of sec 1231 gain
B. $50,000 of
C. $50,000 of ordinary income
D. $20,000 capital gain and $30,000 ordinary income
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