35. B and S, two individuals, who are brother and sister and each own 50 shares ofX Corporation (100 total shares has accumulated FAP of S800,OOO at the beginning ofthe year_B and S each sit on the board of directors of X and earn a salary based on colporate earnings.B 's adjusted basis in B 's 50 shares of X is S I ,OOO per share.S' adjusted basis in S' 50 shares Of X stock is $5,000 per share.During the year X redeems all Of B' s shares for S3 50,000 cash.(This was X' only transaction during the year). a. What income, gain, or loss does B recognize as a result of thc redemption? b. What is X' E&P at the beginning Of the next year? 36. X Corporation has two shareholders: (i) P Corporation which owns 90 shares (90%) Of X Corp. stock, with an adjusted bsis of $70,000, and I individual ("I") who owns I O shares (10%) of X Corp. stock, with an adjusted basis of S14,OOO. X has S 100,000 E&P. X liquidated, pu.uant to a plan of liquidation, and distributed all of its assets to P and as follows: (i) Asset (A1) fair market value ("FMV') $90,000 and adjusted basis ("AB") of$50,ooo to P; and (ii) Asset (A2) FMV $12,000 and AB S15,ooo, but to a S2,ooo liability to 1. a. What income, gain or loss, if any does X recognize as a result of the liquidation? b. What income, gain or loss, if any does I recognize as a result Of the liquidation? c. What basis does I have in A? d, What basis does p have in A1 ?