Question

Rosalie owns 50% of the outstanding stock of Salmon Corporation. In a qualifying stock redemption, Salmon distributes $592,000 to Rosalie in exchange for one-half of her shares, which have a basis of $740,000. Rosalie has a $ realized loss of which $ is recognized.

Answer 1

$148,000

Step-by-step explanation:

The computation of the realized loss recognized is shown below:

= Basis of shares - consideration

= $740,000 - $592,000

= $148,000

By deducting the consideration from the basis of shares we can get the realized loss i.e to be recognized and the same is to be considered while taking the two items together i.e basis of shares and the consideration amount