Pursuant to a complete liquidation, Oriole Corporation distributes to its shareholders land with a basis of $350,000 and a fair market value of $800,000. The land is subject to a liability of $920,000. What is Oriole's recognized gain or loss on the distribution?
A) $0
B) $120,000 loss
C) $450,000 gain
D) $570,000 gain
E) None of the above

Question

Quizplus · Accepted Answer

Oriole Corporation recognizes a gain equal to the excess of the liability over the basis of the land: $920,000 (liability) - $350,000 (basis) = $570,000 gain.

Pursuant to a Complete Liquidation, Oriole Corporation Distributes to Its