Brooks Corporation distributes property with a basis of $20,000 and a fair market value of $25,000 to Caroline in complete liquidation of the corporation.Caroline's basis in the stock is $32,000.What must Caroline and Brooks report as income (loss)upon the liquidation of Brooks?
$ \quad $Caroline $ \quad $$ \quad $Brooks
a. $\$ ( 12,000 ) \quad \$ ( 7,000 )$
b. $\$ ( 12,000 ) \quad \$ 5,000$
c. $\$ ( 12,000 ) \quad \$ - 0 -$
d. $\$ ( 7,000 ) \quad \$ 5,000$

Question

Brooks Corporation distributes property with a basis of $20,000 and a fair market value of $25,000 to Caroline in complete liquidation of the corporation.Caroline's basis in the stock is $32,000.What must Caroline and Brooks report as income (loss)upon the liquidation of Brooks?
$ \quad $Caroline $ \quad $$ \quad $Brooks
a. $\$ ( 12,000 ) \quad \$ ( 7,000 )$
b. $\$ ( 12,000 ) \quad \$ 5,000$
c. $\$ ( 12,000 )  \quad \$ - 0 -$
d. $\$ ( 7,000 ) \quad \$ 5,000$

Quizplus · Accepted Answer

The Answer of Brooks Corporation distributes property with a basis of $20,000 and a fair market value of $25,000 to Caroline in complete liquidation of the corporation.Caroline's basis in the stock is $32,000.What must Caroline and Brooks report as income (loss)upon the liquidation of Brooks?
$ \quad $Caroline $ \quad $$ \quad $Brooks
a. $\$ ( 12,000 ) \quad \$ ( 7,000 )$
b. $\$ ( 12,000 ) \quad \$ 5,000$
c. $\$ ( 12,000 )  \quad \$ - 0 -$
d. $\$ ( 7,000 ) \quad \$ 5,000$

Brooks Corporation Distributes Property with a Basis of $20,000 and a Fair