Paris Corporation has E&P of $200,000. Paris owns all of Slider Corporation's stock, which is worth $80,000. The stock has been held for five years. Paris distributes all of the Slider stock and $20,000 cash to a 50% shareholder in exchange for all of the shareholder's 100 shares of Paris stock. The exchange qualifies as a Sec. 355 split-off transaction. The 50% shareholder's basis in the Paris stock surrendered is $90,000. What is the amount of the gain that the 50% shareholder must recognize?

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The Answer of Paris Corporation has E&P of $200,000. Paris owns all of Slider Corporation's stock, which is worth $80,000. The stock has been held for five years. Paris distributes all of the Slider stock and $20,000 cash to a 50% shareholder in exchange for all of the shareholder's 100 shares of Paris stock. The exchange qualifies as a Sec. 355 split-off transaction. The 50% shareholder's basis in the Paris stock surrendered is $90,000. What is the amount of the gain that the 50% shareholder must recognize?

Paris Corporation Has E&P of $200,000