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safezone safezone
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Sandy, a cash method of accounting taxpayer, has a basis of $46,000 in her 500 shares of Newt Corporation stock. She receives the following distributions as part of Newt's plan of liquidation.

March 31, 2007   $10,000
July 15, 2007   10,000
November 15, 2007   10,000
January 15, 2008   10,000

The amount of the final distribution is not known on December 31, 2007. What are the tax consequences of the distributions?
A) Sandy will recognize a loss of $4,500 in 2007 and a $1,500 loss in 2008.
B) Sandy will recognize the entire loss in 2007.
C) Sandy will recognize the entire loss in 2008.
D) None of the above is correct.
Textbook 
Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts

Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts


Edition: 27th
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RimounRimoun
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