Exercise 20-13 (LO. 1) Pursuant to a complete liquidation, Carrot Corporation distributes to its shareholders real estate held as an investment (basis of $650,000, fair market value of $880,000) a. Determine the gain or loss recognized by Carrot on the distribution if no liability is involved. If no liability is involved, Carrot has a gain of $ on the distribution b. Determine the gain or loss recognized by Carrot on the distribution if the real estate is subject to a liability of $690,000. If the real estate is subject to a liability of $690,000, Carrot has a gain Vof c. Determine the gain or loss recognized by Carrot on the distribution if the real estate is subject to a liability of $885,000. If the liability were $885,000, Carrot's gain on the distribution would be Feedback Check My Work The different means used to liquidate a corporation produce varying tax results. A corporation generally recognizes gain or loss on the distribution of property in a complete liquidation, but there are several exceptions to this rule