Identify which of the following statements is true.
A)Upon liquidation, any capitalized expenditures unamortized at the time of liquidation should be deducted if they have no further value to the corporation.
B)Shareholders who receive an installment obligation as part of their liquidating distribution ordinarily report the FMV of their obligation as part of the consideration received to calculate the amount of recognized gain or loss.
C)A liquidating corporation treats expenses associated with selling its property as an offset against the sales proceeds.
D)All of the above are true.

Question

Quizplus · Accepted Answer

A) Upon liquidation, any capitalized expenditures unamortized at the time of liquidation should be deducted if they have no further value to the corporation. This is true because these expenditures have no future benefit to the corporation.
B) Shareholders who receive an installment obligation as part of their liquidating distribution ordinarily report the FMV of their obligation as part of the consideration received to calculate the amount of recognized gain or loss. This is true as the FMV of the installment obligation represents the value of what the shareholder received.
C) A liquidating corporation treats expenses associated with selling its property as an offset against the sales proceeds. This is true as the expenses associated with selling the property reduce the amount of the sales proceeds that the corporation will ultimately receive.

Identify Which of the Following Statements Is True