Great Times Inc., a Nevada corporation, is in the process of being liquidated. Great Times has two shareholders:

Orange Delight Corp., a Florida corporation, which owns 85% of Great Times's stock, and

Nancy Steel, a U.S. citizen and resident of Texas, who owns 15% of Great Times's stock.

After selling almost of all its assets, Happy Times is left with $850,000 in cash and a vacant oceanside property with an adjusted tax basis of $100,000, and a fair market value of $150,000. Great Times distributes the cash to Orange Delight and the property to Nancy.

Orange Delight has an adjusted tax basis of $450,000 in its Great Times stock. What is the U.S. tax consequence to Orange Delight on the liquidation of Great Times?

a) $0

b) Loss of $250,000

c) Gain of $850,000

d) Gain of $400,000

Nancy has an adjusted tax basis of $50,000 in the Great Times stock. What is the U.S. tax consequence to Nancy on the liquidation of Great Times?

a) $0

b) Loss of $50,000

c) Gain of $100,000

d) Gain of $150,000

Assume the same facts as question 19, except that Orange Delight owns 60% of Great Times's stock. What is the gain to Orange Delight on the liquidation of Great Times?

a) $0

b) Loss of $250,000

c) Gain of $850,000

d) Gain of $400,000