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The stock in Lark Corporation is owned equally by Olaf and his son Pete. In a liquidation of the corporation, Lark Corporation distributes to Olaf land that it had purchased 3 years previously for $550,000. The property has a fair market value on the date of distribution of $400,000. Later, Olaf sells the land for $420,000. Which loss will Lark Corporation recognize with respect to the distribution of the land?

a) $0

b) $20,000

c) $130,000

d) $150,000

e) None of the above

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M938447

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