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What amount of loss can be recognized by palace corp

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Question - Palace Corp. acquired land as a contribution to capital in 2019. The land had a basis of $500,000 and a fair market value of $450,000 on the date of transfer. Palace Corp. has two unrelated shareholders-Robert owns 70% of the stock in Palace Corp. and Susan owns 30%. Palace Corp. adopts a plan of complete liquidation in 2020 and makes a pro rata distribution of the land to Robert and Susan. At the time of the liquidating distribution, the land had a fair market value of $300,000. What amount of loss can be recognized by Palace Corp. on the distribution of the land?

a. $150,000

b. $60,000

c. $50,000

d. $45,000

e. $0

Reference no: EM132860416

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