Global Corporation distributes property with a basis of $22,000 and a fair market value of $30,000 to Arturo in complete liquidation of the corporation.Arturo's basis in the stock is $14,000.What must Arturo and Global report as income upon the liquidation of Global?

Arturo Global
A)$16,000 $8,000
B)$16,000 $-0-
C)$30,000 $-0-
D)$30,000 $30,000

Question

Global Corporation distributes property with a basis of $22,000 and a fair market value of $30,000 to Arturo in complete liquidation of the corporation.Arturo's basis in the stock is $14,000.What must Arturo and Global report as income upon the liquidation of Global?
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Arturo Global
A)$16,000 $8,000
B)$16,000 $-0-
C)$30,000 $-0-
D)$30,000 $30,000

Quizplus · Accepted Answer

Arturo must report a gain of $16,000, which is the difference between the fair market value of the property received ($30,000) and his basis in the stock ($14,000). Global must report a gain of $8,000, which is the difference between the fair market value of the property distributed ($30,000) and its basis ($22,000).

Global Corporation Distributes Property with a Basis of $22,000 and a Fair