four accounting firm has done the audit and tax work for the Peerless family and theirbusiness Entities for 20 years . Approximately 2s' at Your accounting and tax practice*billings come from Peerless family work . Peerless Real Estate Corporation owns landand a building ( MIACRS property'; having a $ 4. 5 million FURY' and a $ 1. 0 million add-justed basis . The corporation owes a $ 1 . 3 million mortgage balance on the building . TheCorporation used substantial leverage to acquire the building so Myron Peerless and hisbrother Mark Peerless , who are equal shareholders in Peerless Real Estate , each have only$ 200, 000 adjusted bases in their stock . Cash flows are good from the building , and only asmall portion of the annual profits is needed for reinvestment in the building . I Lyron andMark have decided to liquidate the corporation to avoid the federal and state corporate*income taxes and continue to operate the business as a partnership . They want the MINIPartnership , which has Mark and Alyron equally sharing profits , losses , and liabilities , topurchase the building from the corporation for $ 400, 000 cash plus their assumption of the$ 1. 3 million mortgage . Mark knows a real Estate appraiser who , for the right price , will!provide a $ 1 . ?' million appraisal . Current corporate cash balances are sufficient to pay anyfederal and state income taxes owed on the sale of the building . Mark and HIuron eachwould receive $ZOO, god from the corporation in cancellation of their stock.Required : Prepare notes on the points You will want to cover with Myron and MarkPeerless about the corporate liquidation and the Peerless" desire to avoid federal and state*Corporate income taxes at Your meeting tomorrow.