A inherited 100% of Corp. X from her mother’s estate. Original Stock Basis was $100,000, FMV of Corp. X at Mom’s death was $300,000, and Corp. X has E&P of $250,000. On June 15, 2022, X makes a distribution of $100,000. X completely liquidates on 12/31/2022 when basis of its assets are $100,000.

a. How is the 6/15/2022 distribution taxed (1 -2 words) _______________________________ b. Code Section for Part a. above §__________

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c. Does Corp. X report any gain/loss on liquidation and if so enter amount and character ___________________

d. Give Code Section for Part c §__________
e. Does A recognize any Gain/Loss and if so, give amount and category. _____________ f. Code Section(s) for Part e. §__________

35. X Corp. assets FMV $2,500,000; Basis $500,000. X Corp. completely liquidates and distributes its assets to A, the sole Shareholder. Shareholder A’s stock basis is $250,000.

Is a formal plan of dissolution required? §__________

What Form is required for X to file to report the liquidation? ___________

Compute Corporate gain/loss indicate amount and category

___________________________________________________________________________ _____________________________________________________________________ ________________________________________________________________________

Code Section for Part c §__________

Compute Corporate Tax $___________________________________________________

________________________________________________________________________

Compute A’s gain/loss. $___________________________________________________

________________________________________________________________________

Code Section for Part f §__________

Assume A is in the maximum tax bracket what is the tax rate applicable to A? (ignore any

surtax) _________________

What is A’s basis in the property received? _________________

Code Section for Part i. Be specific. §__________

If X Corp. was a 100% subsidiary of Y Corp. does X recognize a gain on liquidation and if

so, compute amount. $___________________________________________________

________________________________________________________________________

Code Section(s) for Part k §_____________

What is Y Corp’s basis in the assets in Part k? $____________

Code Section for Part m. Be Specific. §_____________