19. Geranova Corporation is liquidated, with Vlad receiving $7,500 in money, other property having a $5,000...
19. Geranova Corporation is liquidated, with Vlad receiving $7,500 in money, other property having a $5,000 FMV, and a $2,000 mortgage on the property. Vlad’s basis in his Geranova Co. stock is $7,000. Upon liquidation, Vlad must recognize a gain of
A) 2,000.
B) $3,500.
C) $5,000.
D) $12,500.
Homework Answers
ANSWER
Geranova Corporation is liquidated, with Vlade receiving $7,500 in money, other property having a $5,000 FMV, and a $2,000 mortgage on the property.
Vlade’s basis in his Geranova Co. stock = $7,000
Upon liquidation, Vlade’s must recognize a gain = ( 7500 + 5000 - 7000 - 2000 ) = $ 3,500
Option B is correct.
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