Brooks Corporation distributes property with a basis of $20,000 and a fair market value of $25,000 to Caroline in complete liquidation of the corporation.Caroline's basis in the stock is $32,000.What must Caroline and Brooks report as income (loss)upon the liquidation of Brooks?
$\begin{array} { l }
& \text { Caroline}& \text { Brooks}\
a. & \$(12,000) &\$(7,000)\
b. &\$(12,000) &\$ 5,000 \
c. & \$(12,000) & \$-0- \
d. & \$(7,000) &\$ 5,000 \
\end{array}$

Question

Brooks Corporation distributes property with a basis of $20,000 and a fair market value of $25,000 to Caroline in complete liquidation of the corporation.Caroline's basis in the stock is $32,000.What must Caroline and Brooks report as income (loss)upon the liquidation of Brooks?
$\begin{array} { l  }
& \text { Caroline}& \text {  Brooks}\
a. & \$(12,000) &\$(7,000)\
b. &\$(12,000) &\$ 5,000 \
c. & \$(12,000) & \$-0- \
d. & \$(7,000) &\$ 5,000 \
\end{array}$

Quizplus · Accepted Answer

The Answer of Brooks Corporation distributes property with a basis of $20,000 and a fair market value of $25,000 to Caroline in complete liquidation of the corporation.Caroline's basis in the stock is $32,000.What must Caroline and Brooks report as income (loss)upon the liquidation of Brooks?
$\begin{array} { l  }
& \text { Caroline}& \text {  Brooks}\
a. & \$(12,000) &\$(7,000)\
b. &\$(12,000) &\$ 5,000 \
c. & \$(12,000) & \$-0- \
d. & \$(7,000) &\$ 5,000 \
\end{array}$

Brooks Corporation Distributes Property with a Basis of $20,000 and a Fair