What amount of loss may roadrunner recognize on distribution

Reference no: EM133371089

Question: Last year a shareholder transferred land (basis of $650,000, fair market value of $575,000) to Roadrunner Corporation in a $ 351 transaction. This was the only property transferred to Roadrunner at that time. During the current year, Roadrunner Corporation adopted a plan of liquidation and distributed the land to Rhonda, a 15% shareholder. On the date of the distribution, the land had a fair market value of $400,000. Roadrunner Corporation never used the land for business purposes during the time it owned the property.

What amount of loss may Roadrunner recognize on the distribution of the land? In determining the loss, the basis step-down rules apply and the related-party loss limitation apply. Roadrunner Corporation has a recognized a loss of $ on the distribution of the land.

Reference no: EM133371089

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