Determine Osprey recognized gain or loss

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Problem - Osprey Corporation stock is owned by Pedro and Pittro, who are unrelated. Pedro and Pittro each own 50% of the stock in the corporation. Osprey has the following assets (none of which were acquired in a § 351 or contribution to capital transaction) that are distributed in complete liquidation of the corporation.


Adjusted Basis

Fair Market Value

Cash

$300,000

$300,000

Land

200,000

440,000

Equipment

250,000

140,000

Assume that Osprey Corporation distributes the land to Pedro and the cash and equipment to Pittro.

Required -

a. Determine Osprey's recognized gain or loss on the distribution of land.

b. Determine Osprey's recognized gain or loss on the distribution of the equipment.

Reference no: EM132646736

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