Gain or loss on the liquidation of warbler

Reference no: EM13154076

Warbler Corporation ( E&P of $800,00) distributes all of its property in a complete liquidation. Kena, a shareholder, receives $7,000 cash and land having fair market value of $120,000. Warbler had purchased the land three years ago for $105,000. Kena has a $22,000 basis in her Warbler stock that she purchased 10 years ago. What is Kena's gain or loss on the liquidation of Warbler?

a. $0

b. $105,000 long-term capital gain

c. $7,000 dividend and $98,000 long-term capital gain

d. $127,000 dividend

e. None of the above.

Reference no: EM13154076

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