Tester Corporation acquired all of the stock of Socco Corporation five years ago for $400,000. Socco Corporation been completely liquidated this year, and all of its assets have been transferred to Tester Corporation. Immediate to the liquidation, Socco had an adjusted basis in its assets of $560,000, and the assets were worth $700,000.
a. How much gain or loss will Socco recognize due to the liquidation?
b. How much gain or loss will Tester recognize due to the liquidation?
c. What is Tester's adjusted basis in the assets received from Socco?

Question

Quizplus · Accepted Answer

The Answer of Tester Corporation acquired all of the stock of Socco Corporation five years ago for $400,000. Socco Corporation been completely liquidated this year, and all of its assets have been transferred to Tester Corporation. Immediate to the liquidation, Socco had an adjusted basis in its assets of $560,000, and the assets were worth $700,000.
a. How much gain or loss will Socco recognize due to the liquidation?
b. How much gain or loss will Tester recognize due to the liquidation?
c. What is Tester's adjusted basis in the assets received from Socco?

Tester Corporation Acquired All of the Stock of Socco Corporation