Gabriel Corporation is owned 90% by Zeier Corporation and 10% by Ray Goff, a Gabriel employee. A preliquidation balance sheet for Gabriel is presented below:

Gabriel has claimed $150,000 of MACRS depreciation on the equipment. Gabriel purchased the land three years ago as a potential plant site. Plans to build the plant never were consummated, and Gabriel has held the land since then as an investment. Zeier and Ray Goff have $90,000 and $10,000 bases, respectively, in their Gabriel stock. Both shareholders have held their stock since the corporation€™s inception ten years ago. Zeier purchased the Gabriel bonds from an insurance company two years ago for $20,000above their face amount. Gabriel adopts a plan of liquidation. Gabriel transfers $500,000 of inventory to Zeier to retire the bonds. The shareholders receive their share of Gabriel€™s remaining assets and assume their share of Gabriel€™s liabilities (other than federal income taxes). Gabriel pays federal income taxes owed on the liquidation. Assume a 34% corporate tax rate. What are the tax consequences of the liquidation to Ray Goff, Zeier Corporation, and Gabriel Corporation?

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Assets Basis FMV Cash 5 100,000 S 100,000 Inventory 420,000 700,000 Equipment 80,000 100,000 Land 400,000 300.000 Total $1,000,000 $1,200,000 Liabilities & Equity Accounts payable Bonds payable S 100,000 S 100,000 500,000 500,000 Common stock 100,000 600,000 Retained earnings (and E&P) 300,000 Total S1.000,0D0 S1.200,000