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Lecture 20

MGMT 133 Lecture Notes - Lecture 20: Tax Basis, Adjusted BasisExam


Department
Management
Course Code
MGMT 133
Professor
Theresa Aberle
Lecture
20

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1a. What amount of gain or loss ROF recognize in the complete liquidation
A: -39,000
b/c 46,500+(85,500) = -39k
1b. What amount of gain or loss does Tiffany recognize in the complete liquidation?
A: 223,250
b/c 283,250 (Tiffany receive amount of cash in exchange for %) - 50k (tax basis in her ROF
stock)= 223,250
1c.What amount of gain or loss does Carlos recognize in the complete liquidation?
153,750
b/c 283,250 - 129,500 (Carlos’ tax basis in ROF stock) = 153,750
1d. What is Carlos’s tax basis in the building and land after the complete liquidation?
Adjusted basis on Building: 61,250
On land: 222,000
Just get the amount of the chart
1e. Assume Tiffany owns 40 percent of the ROF stock and Carlos owns 60 percent. Tiffany will
receive $226,600 in the liquidation and Carlos will receive the land and building plus $56,650.
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