Jones Mills, Inc. (JMI) decided to liquidate its wholly owned subsidiary, Most Help, Inc. (MH). MH had the following tax accounting balance sheet:

	FMV			Adjusted Basis			Appreciation (Depreciation)
Cash	$	267,650		$	267,650
Building		53,150			10,400			42,750
Land		214,500			279,000			(64,500	)
Total	$	535,300		$	557,050		$	(21,750	)

a. What amount of gain or loss does MH recognize in the complete liquidation? (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)

b. What amount of gain or loss does JMI recognize in the complete liquidation? (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)

c. What is JMIs tax basis in the building and land after the complete liquidation?

multiple choice

• Carryover tax basis

• Tax basis equal to FMV