1. Under a plan of complete liquidation, ABC Corporation distributes land with a $250,000 adjusted basis and a $350,000 FMV to Veronica, a 30% shareholder. Veronica has a $150,000 basis in her ABC stock. The land is inventory in the hands of ABC Corporation. ABC Corporation must recognize

A) no gain.

B) $100,000 of long-term capital gain

C) $100,000 of ordinary income.

D) $350,000 of ordinary income.

2. Under a plan of complete liquidation, Cain Corporation distributes land (not a disqualified property) with an adjusted basis of $410,000 and an FMV of $300,000 for all Gary's stock. Gary's basis in his 10% interest in the Cain stock is $250,000. Find Gary's basis in the land and Cain Corporation's recognized gain or loss.

A)

Basis	Recognized Gain/Loss
$300,000	$110,000 loss

B)

Basis	Recognized Gain/Loss
$250,000	$110,000 loss

C)

Basis	Recognized Gain/Loss
$300,000	$0

D)

Basis	Recognized Gain/Loss
$250,000	$0