16 Required information Part 2 of 2 [The following information applies to the questions displayed below.] Kevin and Bob have owned and operated SOA as a C corporation for a number of years. When they formed the entity, Kevin and Bob each contributed $100,000 to SOA. They each have a current basis of $100,000 in their SOA ownership interest. Information on SOA's assets at the end of year 5 is as follows (SOA does not have any liabilities) 0.35 points Adjusted Basis Built-in Gain $ 40,000 50,000 Assets FMV Cash Inventory Land and building $200,000 80,000 220,000 $200,000 40,000 170,000 $500,000 Total At the end of year 5, SOA liquidated and distributed half of the land, half of the inventory, and half of the cash remaining after paying taxes (if any) to each owner. Assume that, excluding the effects of the liquidating distribution, SOA's taxable income for year 5 is $0. b. What is the amount and character of gain or loss Kevin will recognize when he receives the liquidating distribu property? Recall that his stock basis is $100,000 and he is treated as having sold his stock for the liquidation proceeds. of cash and Answer is complete but not entirely correct Long term capital gain $ 136,500 16 Required information Part 2 of 2 [The following information applies to the questions displayed below.] Kevin and Bob have owned and operated SOA as a C corporation for a number of years. When they formed the entity, Kevin and Bob each contributed $100,000 to SOA. They each have a current basis of $100,000 in their SOA ownership interest. Information on SOA's assets at the end of year 5 is as follows (SOA does not have any liabilities) 0.35 points Adjusted Basis Built-in Gain $ 40,000 50,000 Assets FMV Cash Inventory Land and building $200,000 80,000 220,000 $200,000 40,000 170,000 $500,000 Total At the end of year 5, SOA liquidated and distributed half of the land, half of the inventory, and half of the cash remaining after paying taxes (if any) to each owner. Assume that, excluding the effects of the liquidating distribution, SOA's taxable income for year 5 is $0. b. What is the amount and character of gain or loss Kevin will recognize when he receives the liquidating distribu property? Recall that his stock basis is $100,000 and he is treated as having sold his stock for the liquidation proceeds. of cash and Answer is complete but not entirely correct Long term capital gain $ 136,500