Question

.Match the result of a corporate noncash property distribution with its result.

Taxable gain to the corporationfair market value of distributed property is less than adjusted basis. Loss not recognizedfair market value of distributed property exceeds its adjusted basis.

Answer 1

A noncash property distribution by a corporation can result in a taxable gain or a loss not recognized, depending on the fair market value and adjusted basis of the property.

Step-by-step explanation:

When a corporation distributes noncash property, the result can vary depending on the fair market value of the property and its adjusted basis. If the fair market value is less than the adjusted basis, the corporation will have a taxable gain. This means that the corporation will owe taxes on the difference between the fair market value and the adjusted basis.

On the other hand, if the fair market value of the distributed property exceeds its adjusted basis, the corporation will not recognize a loss. This means that the corporation cannot claim a deduction for the difference between the fair market value and the adjusted basis as a loss.