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What loss does JER recognize on the distributions

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Problem 1: ?Jon, Ellyn and Rori each own 100 shares of JER Corporation. JER adopts a plan of complete liquidation. JER distributes? $100,000 of cash to? Jon; a capital asset with a fair market value of? $100,000 and a tax basis? $120,000 to? Ellyn; inventory with a fair market value of? $100,000 and tax basis of? $70,000 to Rori. What gain? and/or loss does JER recognize on these distributions??

A. capital loss? $20,000

B. No gain or loss

C. ordinary income? $30,000

D. capital loss? $20,000 and ordinary income? $30,000

Reference no: EM132842405

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