Dove Corporation owns land (basis of $260,000, fair market value of $300,000) that it purchased as an investment seven years ago. In the current year Dove distributes the land to Alexandra in a liquidating distribution. Alexandra had a basis of $275,000 in the shares. How much gain or loss is recognized by Alexandra? a. $0. b. ($15,000) loss. c. $25,000 gain. d. $60,000 gain.

6. Pansy, the parent corporation, has a basis of $540,000 in the stock of Green Corporation, a subsidiary in which it owns 90% of all classes of stock. Pansy purchased the stock in Green Corporation 10 years ago. In the current year, Pansy Corporation liquidates Green Corporation and acquires assets worth $280,000 with a tax basis to Green Corporation of $300,000. No election is made under 338. What basis will Pansy Corporation have in the assets acquired from Green Corporation? a. $0. b. $280,000. c. $300,000. d. $540,000.

7. All of the following statements are true about tax free reorganization except: a. No gain or loss is recognized by the acquiring corporation unless it transfers property to the target corporation as part of the transaction. b. The basis of property received by the acquiring corporation is the basis the property had in the hands of the target corporation plus gain recognized by the target. c. The target corporation may recognize both gains and losses. d. Gain recognized by stockholders is the lesser of the boot received or the realized gain.

8. The stock in Rose Corporation is held equally by two unrelated shareholders, Tom and Jerry. One year before its liquidation, in a 351 tax-free exchange, the shareholders transfer property (basis of $500,000, fair market value of $300,000) to Rose Corporation in return for stock. In a current year liquidation, Rose Corporation transfers the property (now worth $350,000) pro rata to the shareholders. Rose never used the land for any business purpose during the time it was owned by the corporation. What amount of gain or loss will Rose Corporation recognize on the distribution? a. $0. b. ($150,000). c. ($200,000). d. $50,000 gain.