Liquidation-the shareholders transfer property

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Reference no: EM131290110

The stock in Rose Corporation is held equally by two sisters. One year before its liquidation, the shareholders transfer property (basis of $500,000, fair market value of $300,000) to Rose Corporation in return for stock. In a current year liquidation, Rose Corporation transfers the property (now worth $250,000) pro rata to the sisters. What amount of loss will Rose Corporation recognize on the distribution?

(Give an explanation for yout answer)

a. $0.

b. $250,000.

c. $200,000.

d. $50,000.

e. None of the above

Reference no: EM131290110

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