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Indigo Corporation wants to transfer cash of $546,400 or property...

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Indigo Corporation wants to transfer cash of $546,400 or property...

Indigo Corporation wants to transfer cash of $546,400 or property worth $546,400 to one of its shareholders, Brianna, in a redemption transaction that will be treated as a qualifying stock redemption. If Indigo distributes property, the corporation will choose between two assets that are each worth $546,400 and are no longer needed in its business: Property A (basis of $273,200) and Property B (basis of $710,320).

Question Content Area

 

a.  Compute Indigo's recognized gain or loss if it distributes Property A in redemption of Brianna's shares.

The distribution of Property A would result in a realized

gainloss

of $fill in the blank 87040b02d031ffc_2 to Indigo, of which $fill in the blank 87040b02d031ffc_3 is recognized.

 

 

 

Question Content Area

 

b.  Compute Indigo's recognized gain or loss if it distributes Property B in redemption of Brianna's shares.

The distribution of Property B would result in a realized

gainloss

of $fill in the blank 711389017060faf_2 to Indigo, of which $fill in the blank 711389017060faf_3 is recognized.

 

 

 

Question Content Area

 

c.  Compute Indigo's recognized gain or loss if it sells Property B to an unrelated party, then distributes the sale proceeds in redemption of Brianna's shares.

A sale of Property B to an unrelated party would result in a realized

gainloss

of $fill in the blank 77d285035ff0fe4_2 to Indigo, of which $fill in the blank 77d285035ff0fe4_3 is recognized.

 

 

 

 

Answer & Explanation

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Answered by dumalaganreixmar on coursehero.com

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Step-by-step explanation

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