The stock of Cardinal Corporation is held as follows: 90% by Blue Jay Corporation (basis of $500,000)and 10% by Samuel (basis of $70,000).Cardinal Corporation is liquidated on October 20,2010,pursuant to a plan adopted on January 8,2010.Pursuant to the liquidation,Cardinal Corporation distributed Asset A (basis of $450,000,fair market value of $720,000)to Blue Jay,and Asset B (basis of $45,000,fair market value of $80,000)to Samuel.No election is made under § 338.With respect to the liquidation of Cardinal:
A)Samuel recognizes no gain (or loss).
B)Blue Jay has a basis in Asset A of $720,000.
C)Cardinal Corporation recognizes a gain of $35,000.
D)Blue Jay recognizes a gain of $220,000.
E)None of the above.

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The Answer of The stock of Cardinal Corporation is held as follows: 90% by Blue Jay Corporation (basis of $500,000)and 10% by Samuel (basis of $70,000).Cardinal Corporation is liquidated on October 20,2010,pursuant to a plan adopted on January 8,2010.Pursuant to the liquidation,Cardinal Corporation distributed Asset A (basis of $450,000,fair market value of $720,000)to Blue Jay,and Asset B (basis of $45,000,fair market value of $80,000)to Samuel.No election is made under § 338.With respect to the liquidation of Cardinal:
A)Samuel recognizes no gain (or loss).
B)Blue Jay has a basis in Asset A of $720,000.
C)Cardinal Corporation recognizes a gain of $35,000.
D)Blue Jay recognizes a gain of $220,000.
E)None of the above.

The Stock of Cardinal Corporation Is Held as Follows: 90