Prime corporation liquidates its 85% owned subsidiary bass corporation under the provisions of secs. 332 and 337. bass corporation distributes land to its minority shareholder, john, who owns a 15% interest. the property received by john has a $55,000 fmv. the land was used in the bass corporation's business and has a $65,000 adjusted basis and is subject to a $10,000 liability, which is assumed by john. john's basis in his stock is $25,000. what gain or loss will john and bass corporation recognize on the distribution of the land?

$20000 gain for John Corporation and $10000 loss for Bass Corporation.

Explanation:

John Corporation gain(loss) = FMV of property - Liability assumed - Stock basis

                                               = 55000-10000-25000

                                               = 20000

Bass Corporation gain/loss = 55000-65000

                                              = - 10000

Therefore,  $20000 gain for John Corporation and $10000 loss for Bass Corporation.

first one

explanation:

urban company reports the following information regarding its production cost: units produced 37,000 units direct labor $ 30 per unit direct materials $ 35 per unit variable overhead $ 237,000 in total fixed overhead $ 127,000 in total