Child Corporation has 100 shares of common stock outstanding. Mother Corporation owns 75 shares (basis-$1,000) and Uncle, an individual who recently inherited his stock, owns 25 shares (basis$3,000). Child has no earnings and profits, a $10,000 net operating loss carryover and the following assets (all held long-term):

Asset Adjusted Basis Fair Market Value

Cash $2,000 $2,000

Installment Note 1,000 4,000

Land 100 1,000

Equipment (all 1245 gain) 100 1,000

Total $3,200 $8,000

What are the tax consequences in the following alternative situations, disregarding the impact of any tax paid by Child as a result of its liquidating distributions?

(a) Child adopts a plan of complete liquidation and distributes $2,000 cash to Uncle and all its remaining assets to Mother.

(b) Child distributes $2,000 cash to Uncle in redemption of his 25 shares. One week later, it adopts a plan of complete liquidation and distributes its remaining assets to Mother pursuant to the plan. What are Mother and Child trying to accomplish through this reunion?