Melon Corporation, which is owned equally by four individual shareholders, adopts a plan of liquidation for distributing

Question:

Melon which is owned equally by four individual shareholders, adopts a plan of for distributing the following property:
• Land (a capital asset) having a $30,000 FMV and a $12,000 adjusted basis.
• Depreciable personal property having a $15,000 FMV and a $9,000 adjusted basis. Melon has claimed depreciation of $10,000 on the property during the three years since its acquisition.
• Installment obligations having a $30,000 FMV and face amount and a $21,000 adjusted basis, acquired when Melon sold a Sec. 1231 property.
• Supplies that cost $6,000 and were expensed in the preceding tax year. The supplies have a $7,500 FMV.
• Marketable securities having a $15,000 FMV and an $18,000 adjusted basis. Melon purchased the marketable securities from a 12 months ago.
a. Which property, when distributed by Melon to one of its shareholders, will require the distributing to recognize gain or loss?
b. How will your answer to Part a change if the instead is made to Melon’s parent as part of a complete meeting the Sec. 332 requirements?
c. How will your answer to Part b change if the instead is made to a minority shareholder?
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