85) What basis do both the parent and minority shareholders take in the assets received in a Sec….

85) What basis do both the parent and
minority shareholders take in the assets received in a Sec. 332 liquidation?

86) Why should a corporation that is 100%
owned by another corporation be treated differently when it liquidates than a
corporation that is 100% owned by an individual?

87) What attributes of a controlled
subsidiary corporation are carried over to the parent when the subsidiary is
liquidated?

88) Jack has a basis of $36,000 in his
1,000 shares of Acorn Corporation stock (a capital asset). The stock was
acquired three years ago. He receives the following distributions as part of a
plan of liquidation of Acorn Corporation:

Date Amount
March 31
of 2009 $10,000
July 15
of 2009 10,000
November
15 of 2010 10,000
January
15 of 2010 10,000

What are the amount and character of the
gain or loss that Jack will recognize during 2009? During 2010?

89) Penny, a cash-basis taxpayer, reported
a $15,000 long-term capital gain on the exchange of her Midwest Corporation
stock when the corporation liquidated in 2007. Midwest subsequently lost a
lawsuit and Penny paid an additional $3,000 in 2009 as her part of the
settlement. What are the tax consequences to Penny in 2009 of the $3,000
additional payment she made?

90) New York Corporation adopts a plan of
liquidation on March 15 and shortly thereafter sells a parcel of land on which
it realizes a $15,000 gain (excluding the effects of a $2,000 sales commission).
New York pays its legal counsel $500 to draft the plan of liquidation. All of
New York’s remaining properties are distributed to its shareholders on
September 15. What are the tax consequences to New York on the land sale?

91) Are liquidation and dissolution the
same? Explain your answer.

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