Heather, an individual, owns all of the outstanding stock in Silver Corporation. Heather purchased her stock in Silver nine years ago, and her basis is $56,000. At the beginning of this year, the corporation has $76,000 of accumulated E & P and no current E & P (before considering the effect of the distributions as noted below).

Complete the following which outline the tax consequences to Heather (i.e., the amount and type of income and basis in property received) and to Silver Corporation (i.e., the gain or loss and the effect on E & P) in each of the following situations.

Note: If an amount is zero, enter "0".

a. Silver distributes land to Heather. The land was held as an investment and has a fair market value of $54,000 and an adjusted basis of $42,000.

Heather's basis in the land is $_____. Silver recognizes a SelectgainlossCorrect 2 of Item 1 of $. After the distribution, Silver's current E & P, will be $_______.

b. Silver distributes land to Heather. The land was held as an investment and has a fair market value of $54,000 and an adjusted basis of $42,000. Assume that Silver Corporation has no current or accumulated E & P prior to the distribution.

Heather's basis in the land is $_____. The distribution triggers $_____ of SelectgainlossCorrect 3 of Item 2 to Silver and results in $ ______of current E & P.

c. Silver distributes land to Heather. The land was held as an investment and has a fair market value of $54,000 and an adjusted basis of $42,000. Assume that the land distributed is subject to a $46,000 mortgage (which Heather assumes).

Heather's basis in the land is $. Silver recognizes $ of SelectgainlossCorrect 3 of Item 3 and has a resulting current E & P of $.

d. Silver distributes land to Heather. Assume that the land has a fair market value of $54,000 and an adjusted basis of $62,000 on the date of the distribution.

Heather' basis in the land is $. Silver has a $ realized SelectgainlossCorrect 3 of Item 4 of which $ is recognized. Silver has accumulated E & P at the beginning of the following year of $ .

e. Instead of distributing land, assume that Silver decides to distribute equipment used in its business. The equipment has a $14,000 market value, a $1,200 adjusted basis for income tax purposes, and a $5,200 adjusted basis for E & P purposes. When the equipment was purchased four years ago, its original fair market value was $18,000.

Heather has a $ basis in the equipment. Silver recognizes SelectgainlossCorrect 2 of Item 5 of $ on the distribution. Current E & P is SelectincreaseddecreasedCorrect 4 of Item 5 by $.