Reference no: EM131105890

1. With respect to a complete liquidation of a corporation, which Code Sectionor Sections provide the rulesregarding recognition of gain or loss by shareholders - other than a shareholder that is the corporate parent meeting the requirements of Code Section 1504(a)(2) - of the liquidating corporation?

a. Code Section 336(b).
b. Code Section337.
c. Code Sections1001(c), 331(a) and (c).
d. Code Sections 1001(a) and 331(b).

2. With respect to a complete liquidation of a corporation, which Code Sectionprovides the rules regarding recognition of gain or loss by a shareholder that is the corporate parent meeting the requirements of Code Section 1504(a)(2)? Assume the plan of liquidation is adopted and the liquidation is completed within one calendar year.

a. Code Section 336(a).
b. Code Section 332(a).
c. Code Section 331(a).
d. Code Section334(b).

3. With respect to the complete liquidation of a corporation, which Code Sectionprovides the general rule regarding recognition of gain or loss by the liquidating corporation with respect to distributions to shareholders covered by question 1?

a. Code Section 336(b).
b. Code Section 331.
c. Code Sections 1001(c), 331(a) and (c).
d. Code Section336(a).

4. With respect to the complete liquidation of a corporation, which Code Sectionprovides the general rule regarding recognition of gain or loss by the liquidating corporation with respect to distributions to the shareholder covered by question 2?

a. Code Section 334.
b. Code Section 336(a).
c. Code Section 337.
d. none of the above.

5. With respect to the complete liquidation of a corporation, which Code Sectiongoverns the determination of the basis in the hands of a transferee shareholder covered by question 1 of property distributed to the shareholder by the liquidating corporation?

a. Code Section 334(a).
b. Code Section 334(b).
c. Code Section 331.
d. none of the above.

6. With respect to the complete liquidation of a corporation, which Code Section governs the determination of the basis in the hands of the transferee shareholder covered by question 2 of property distributed to it by the liquidating corporation?

a. Code Section 334(a).
b. Code Section 334(b).
c. Code Section 331.
d. none of the above.

7. ABC Corporation owns 80 percent of the voting stock and voting power and stock representing 80% of the total value of DEF Corporation. Linda owns the remaining 20 percent of DEF's stock by voting power and value. ABC Corporation's basis for its DEF Corporation stock is $300,000 and Linda's basis in her DEF Corporation stock is $80,000. Pursuant to a plan of complete liquidation of DEF Corporation adopted on January 15, 2015, ABC Corporation, on September 15, 2015 surrendered all of its stock in DEF Corporation and in return, ABC Corporation received property with a $400,000 adjusted basis to DEF Corporation and a $480,000 fair market value. On the same day, Linda surrendered all of her stock in DEF Corporation, and Linda received property with a $130,000 adjusted basis to DEF Corporation and a $120,000 fair market value. How much gain or loss is recognized by Linda on this transaction and what Code Section or Sections govern?

a. $40,000; Code Section 336(b).
b. $50,000; Code Section 331 and 336.
c. $40,000; Code Sections 1001, 331(a) and (c).
d. $10,000; Code Sections 1001(a) and 331(b).

8. ABC Corporation owns 80 percent of the voting stock and voting power and stock representing 80% of the total value of DEF Corporation. Linda owns the remaining 20 percent of DEF's stock by voting power and value. ABC Corporation's basis for its DEF Corporation stock is $300,000 and Linda's basis in her DEF Corporation stock is $80,000. Pursuant to a plan of complete liquidation of DEF Corporation adopted on January 15, 2015, ABC Corporation, on September 15, 2015 surrendered all of its stock in DEF Corporation and in return, ABC Corporation received property with a $400,000 adjusted basis to DEF Corporation and a $480,000 fair market value. On the same day, Linda surrendered all of her stock in DEF Corporation, and Linda received property with a $130,000 adjusted basis to DEF Corporation and a $120,000 fair market value. How much gain or loss is recognized by ABC Corporation on this transaction and what Code Section or Sections govern?

a. $180,000; Code Sections 1001, 331(a) and (c).
b. $0; Code Section 332(a).
c. 10,000; Code Section 332(a).
d. 180,000; Code Section 336.

9. ABC Corporation owns 80 percent of the voting stock and voting power and stock representing 80% of the total value of DEF Corporation. Linda owns the remaining 20 percent of DEF's stock by voting power and value. ABC Corporation's basis for its DEF Corporation stock is $300,000 and Linda's basis in her DEF Corporation stock is $80,000. Pursuant to a plan of complete liquidation of DEF Corporation adopted on January 15, 2015, ABC Corporation, on September 15, 2015 surrendered all of its stock in DEF Corporation and in return, ABC Corporation received property with a $400,000 adjusted basis to DEF Corporation and a $480,000 fair market value. On the same day, Linda surrendered all of her stock in DEF Corporation, and Linda received property with a $130,000 adjusted basis to DEF Corporation and a $120,000 fair market value. How much gain or loss is recognized by DEF Corporation with respect to the distribution to ABC Corporation, and what Code Section governs?

a. $180,000; Code Sections 1001, 331(a) and (c).
b. $0; Code Section 332(a).
c. $10,000; Code Section 332(a).
d. $0; Code Section 337.

10. ABC Corporation owns 80 percent of the voting stock and voting power and stock representing 80% of the total value of DEF Corporation. Linda owns the remaining 20 percent of DEF's stock by voting power and value. ABC Corporation's basis for its DEF Corporation stock is $300,000 and Linda's basis in her DEF stock is $80,000. Pursuant to a plan of complete liquidation of DEF Corporation adopted on January 15, 2015, ABC Corporation, on September 15, 2015 surrendered all of its stock in DEF Corporation and in return, ABC Corporation received property with a $400,000 adjusted basis to DEF Corporation and a $480,000 fair market value. On the same day, Linda surrendered all of her stock in DEF Corporation, and Linda received property with a $130,000 adjusted basis to DEF Corporation and a $120,000 fair market value. Linda's basis in the property distributed to her by DEF Corporation is and the governing Code Section is:

a. $120,000; Code Section 334(b).
b. $130,000: Code Section 334(a)
c. $80,000; Code Section 331.
d. $120,000: Code Section 334(a).

11. ABC Corporation owns 80 percent of the voting stock and voting power and stock representing 80% of the total value of DEF Corporation. Linda owns the remaining 20 percent of DEF's stock by voting power and value. ABC Corporation's basis for its DEF Corporation stock is $300,000 and Linda's basis in her DEF Corporation stock is $80,000. Pursuant to a plan of complete liquidation of DEF Corporation adopted on January 15, 2015, ABC Corporation, on September 15, 2015 surrendered all of its stock in DEF Corporation and in return, ABC Corporation received property with a $400,000 adjusted basis to DEF Corporation and a $480,000 fair market value. On the same day, Linda surrendered all of her stock in DEF Corporation, and Linda received property with a $130,000 adjusted basis to DEF Corporation and a $120,000 fair market value. ABC Corporation's basis in the property distributed to it, and the governing Code Section is?

a. $480,000; Code Section 334(a).
b. $400,000; Code Section 334(b).
c. $300,000; Code Section 331.
d. $400,000; Code Section 334(a).