20.12

The stock of Mulberry Corporation is owned by Archana (60%) and Anar (40%), who are mother and daughter. Pursuant to a plan of complete liquidation adopted earlier in the current year, Mulberry distributes land worth $1,220,000 to Anar (basis of $195,200 in Mulberry stock). The land was purchased by Mulberry Corporation three years ago for $1,586,000, and it is distributed subject to a liability of $976,000. What amount of gain or loss is recognized by Mulberry Corporation and by Anar with respect to the distribution of the land? Mulberry Corporation has a 1 on the distribution of the land. Anar recognizes a of 3 on the llquidating distribution, and has a basis in the land of 1