Exercise $6-32($Algorithmic$)($LO$.4)$

Osprey Corporation stock is owned by Pedro and Pittro, who are unrelated. Pedro and Pittro each own $50\%$ of the stock in the corporation.

Osprey has the following assets $($none of which were acquired in a $351$ or contribution to capital transaction$)$ that are distributed in

complete liquidation of the corporation.

Assume that Osprey Corporation distributes the land to Pedro and the cash and equipment to Pittro.

a$.$ Determine Osprey's recognized gain or loss on the distribution of land.

Osprey recognizes a

on the distribution of the land.

b$.$ Determine Osprey's recognized gain or loss on the distribution of the equipment.

Osprey realizes a

$$ of $

on the equipment, of which $q$

is recognized.

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Under $336($a$),$ a corporation recognizes gain or loss on the distribution of property in a complete liquidation as if the property were sold at its