The stock of Brown Corporation (E & P of $680,000)is owned as follows: 95% by Black Corporation (basis of $380,000),and 5% by Susanna (basis of $20,000).Both shareholders purchased their shares in Brown five years ago.In the current year,Brown Corporation liquidates and distributes land (fair market value of $950,000,basis of $550,000)to Black Corporation,and securities (fair market value of $50,000,basis of $35,000)to Susanna.Which of the following statements is incorrect with respect to the tax consequences resulting from these distributions?
A)Susanna recognizes a $30,000 gain and has a $35,000 basis in the securities.
B)Brown recognizes no gain on the distribution of the land.
C)Black recognizes no gain and has a $550,000 basis in the land.
D)Brown recognizes a $15,000 gain on the distribution of the securities.
E)None of the above.

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The Answer of The stock of Brown Corporation (E & P of $680,000)is owned as follows: 95% by Black Corporation (basis of $380,000),and 5% by Susanna (basis of $20,000).Both shareholders purchased their shares in Brown five years ago.In the current year,Brown Corporation liquidates and distributes land (fair market value of $950,000,basis of $550,000)to Black Corporation,and securities (fair market value of $50,000,basis of $35,000)to Susanna.Which of the following statements is incorrect with respect to the tax consequences resulting from these distributions?
A)Susanna recognizes a $30,000 gain and has a $35,000 basis in the securities.
B)Brown recognizes no gain on the distribution of the land.
C)Black recognizes no gain and has a $550,000 basis in the land.
D)Brown recognizes a $15,000 gain on the distribution of the securities.
E)None of the above.

The Stock of Brown Corporation (E & P of $680,000)is