Lake City Corporation owns all of the stock in Columbia Corporation. Pursuant to a plan of complete liquidation, Columbia distributes land having a $500,000 FMV and a $200,000 basis to Lake City. Lake City's basis in the land will be

Question

Quizplus · Accepted Answer

When Columbia distributes land having a FMV of $500,000 and a basis of $200,000 to Lake City, Lake City's basis in the land will be equal to the basis of Columbia preceding the distribution. Therefore, Lake City's basis in the land will be $200,000.

Lake City Corporation Owns All of the Stock in Columbia