ABC Corporation has the following assets

Asset	Fair Market Value	Tax Basis
Cash	900,000	900,000
Inventory	1,650,000	1,500,000
Equipment	1,250,000	300,000
Land	1,200,000	900,000
Building	3,400,000	2,300,000
Total	8,400,000	5,900,000

On 3-16-2016 ABC adopted a formal plan of liquidation. The liquidation was completed on 9-29-2016, with a distribution of assets to the shareholder(s).

SITUATION 1: ABC is owned by George Wilson. Georges basis in his ABC shares is $3,000,000. He has a long-term holding period so that any capital gains will be taxed at no more than 20%. Show the tax effects of the liquidation on ABC Corporation and its shareholder George, including recognized gain (if any), tax paid, and basis of assets received.

SITUATION 2: ABC is owned by DEF Corporation. DEFs basis in its ABC shares is $3,000,000. DEF receives no preferential tax rate for capital gains. Show the tax effects of the liquidation on ABC Corporation and its shareholder DEF, including recognized gain (if any), tax paid, and basis of assets received.

SITUATION 1 VARIATION: ABC has a NOL of $4,000,000.

SITUATION 2 VARIATION: ABC has a NOL of $4,000,000