Parent Corporation owns 80% of the single class of Subsidiary Corporation stock. The remaining 20% of the Subsidiary stock is owned by Ramon. Parent and Ramon have adjusted bases of $100,000 and $25,000, respectively, for their Subsidiary stock. After adopting a plan of liquidation, Subsidiary Corporation is left with two properties: land having a $40,000 adjusted basis and a $160,000 FMV, and $40,000 in money. Subsidiary Corporation has a $50,000 E&P balance on the liquidation date. 

a) What are the tax consequences to Parent and Subsidiary Corporations and Ramon of distributing the land to Parent in redemption of its Subsidiary stock and distributing the money to Ramon in redemption of his Subsidiary stock? 

b) How would your answer to Part a change if the land and the money were instead distributed ratably to Parent Corporation and Ramon in retirement of the Subsidiary stock?