Question

Pursuant to a complete liquidation, Oriole Corporation distributes to its shareholders land held for three years as an investment (adjusted basis of $250,000, fair market value of $490,000). The land is subject to a liability of $520,000. What are the tax consequences to Oriole Corporation on the distribution of the land

Answer 1

Answer:

A. $270,000

B.$240,000

Explanation:

A.

$520,000 -$250,000 = $270,000

Therefore the tax consequences to Oriole Corporation on the distribution of the land is that Orile corporation will recognize a gain or profit of $270,000

B. $ 490,000 - $250,000 = $240,000

Therefore the tax consequences to Oriole Corporation on the distribution of the land is that Orile corporation will recognize a gain or profit of $240,000