Cartman Corporation owns $90$ shares of SP Corporation. The remaining $10$ shares are owned by Kenny $($an individual$).$ After several years of operations, Cartman decided to liquidate SP Corporation by distributing the assets to Cartman and Kenny. The tax basis of Cartman's shares is $$8,000,$ and the tax basis of Kenny's shares is $$3,000.$ SP reported the following balance sheet at the date of liquidation:

Tax basis FMV

Cash $ $10,000$ $ $10,000$

Accounts receivable $6,0006,000$

Stock investment $6,40010,000$

Land $20,00074,000$

Total assets $ $42,400$ $ $100,000$

Common stock$$Cartman $(90\%)$ $ $90,000$

Common stock$$Kenny $(10\%)10,000$

Total shareholder equity $ $100,000$

Compute the gain or loss recognized by SP$,$ Cartman, and Kenny on a complete liquidation of the corporation, where SP distributes $$10,000$ of cash to Kenny and the remaining assets to Cartman.

Compute the gain or loss recognized by SP$,$ Cartman, and Kenny on a complete liquidation of the corporation, where SP distributes the stock investment to Kenny and the remaining assets to Cartman. Assume that SP$\text{'}$s tax rate is zero.

What form needs to be filed with the liquidation of SP$?$Cartman Corporation owns $90$ shares of SP Corporation. The remaining $10$ shares are owned by Kenny $($an individual$).$ After several

years of operations, Cartman decided to liquidate SP Corporation by distributing the assets to Cartman and Kenny. The tax basis of

Cartman's shares is $$8,000,$ and the tax basis of Kenny's shares is $$3,000.$ SP reported the following balance sheet at the date of

Required:

a$.$ Compute the gain or loss recognized by SP$,$ Cartman, and Kenny on a complete liquidation of the corporation, where SP distributes

$$10,000$ of cash to Kenny and the remaining assets to Cartman.

b$.$ Compute the gain or loss recognized by SP$,$ Cartman, and Kenny on a complete liquidation of the corporation, where SP distributes

the stock investment to Kenny and the remaining assets to Cartman. Assume that SP$\text{'}$s tax rate is zero.

c$.$ What form needs to be filed with the liquidation of SP$?$

Complete this question by entering your answers in the tabs below.

a$.$ Compute the gain or loss recognized by SP$,$ Cartman, and Kenny on a complete liquidation of the corporation, where SP

distributes $$10,000$ of cash to Kenny and the remaining assets to Cartman.

b$.$ Compute the gain or loss recognized by SP$,$ Cartman, and Kenny on a complete liquidation of the corporation, where SP

distributes the stock investment to Kenny and the remaining assets to Cartman. Assume that SP$\text{'}$s tax rate is zero.

Note:For both requirements, leave no answers blank. Enter zero if applicable.