Blue Corp. is owned by two unrelated individuals, Alan and Sandy. Alan owns 80% of Blue Corp and Sandy owns 20%. Assume Blue Corp. has two assets both of which were purchased 7 years ago, equipment, adjusted basis $150,000, fair market value, $200,000, and a building, fair market value, $800,000, adjusted basis $900,000. In a complete liquidation the building is distributed to Alan and the equipment to Sandy. What are the tax consequences to Blue Corporation of the complete liquidation? Assume Alans basis in his shares in Blue Corporation was $100,000. What are the tax consequences to Alan of the complete liquidation?

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