eBook Calculator Problem 6-60 (LO. 4) Pursuant to a complete liquidation in the current year, Scarlet Corporation distributes to Jake land (basis of $425,000, fair market value of $390,000) that was purchased three years ago and held as an investment. The land is subject to a liability of $250,000. Jake, who owned 35% of the Scarlet Corporation shares outstanding, had a basis of $60,000 in the stock. What are the tax consequences of the liquidating distribution to Scarlet Corporation and to Jake? On the liquidating distribution of land, Scarlet Corporation vwll recognize a long-term capital os35,000.and lake 35,000,and Jake of . Jake will have a basis of 390,000 in the land. will recognize a long-term capital gain