Jack Corporation is owned 75% by Sherri and 25% by Mark. Sherri and Mark have

$125,000 and $50,000 bases in their stock, respectively. Jack Corporation adopts a plan of

liquidation on March 1. On April 12, Sherri receives the following property as a liquidating

distribution: cash of $30,000; land, $125,000 FMV; and 150 shares of Green Corporation

stock, $30,000 FMV. The land is subject to a $20,000 mortgage. On the same date, Mark

receives $10,000 FMV of Green stock (50 shares) and cash of $45,000 as a liquidating

distribution. The land has a basis of $50,000 and the stock has a basis of $70,000 in Jack

Corporation's hands. Both are capital assets to Jack Corporation and have been held for a

number of years.