Ten years ago Finn Corporation formed a new 100 percent owned subsidiary,Wing Corporation,with a $500,000 investment.Wing Corporation is completely liquidated this year,with all assets distributed to Finn Corporation.As of the liquidation date,Wing has a basis in its assets of $350,000,and the assets are valued at $550,000.What is the gain or loss recognized by Finn Corporation due to the liquidating distribution,and what is Finn Corporation's basis in the assets received from Wing Corporation?
A)

\begin{array} { | l | l | } \hline \text { Gain Recognized by Finn } & \text { Finn Corp's Basis in Distributed } \\\text { Corporation } & \text { Assets } \\\hline \$ 50,000 \text { recognized } & \$ 550,000 \text { basis } \\\hline\end{array}

\begin{array} { | l | l | } \hline \text { Gain Recognized by Finn } & \text { Finn Corp's Basis in Distributed } \\\text { Corporation } & \text { Assets } \\\hline \$ 0 \text { recognized } & \$ 550,000 \text { basis } \\\hline\end{array}

\begin{array} { | l | l | } \hline \text { Gain Recognized by Finn } & \text { Finn Corp's Basis in Distributed } \\\text { Corporation } & \text { Assets } \\\hline \$ 0 \text { recognized } & \$ 350,000 \text { basis } \\\hline\end{array}

\begin{array} { | l | l | } \hline \text { Gain Recognized by Finn } & \text { Finn Corp's Basis in Distributed } \\\text { Corporation } & \text { Assets } \\\hline \$ 0 \text { recognized } & \$ 500,000 \text { basis } \\\hline\end{array}

John Transfers Assets with a $200,000 FMV (Basis $160,000)and $170,000

Multiple Choice

Correct Answer:VerifiedUnlock this answer nowGet Access to more Verified Answers free of chargeAccess For Free

Correct Answer:
Verified
Unlock this answer now
Get Access to more Verified Answers free of charge