Mug Corporation has CEP of $150,000 and AEP of $30,000 and is owned as follows. Henrieta 25%, Petunia 30%, Dudley 40% and Broom Corp 5%. Petunia and Dudley are mom/son. All of the other shareholders are friendly but are otherwise not related. What is the tax consequence in each scenario for the shareholder and Mug Corporation?

- Mug makes a liquidating distribution of land to Henrietta. Mug acquired (purchased) the land 3 years ago for $210,000 and at distribution it has a FMV of $100,000. The land is subject to a $20,000 liability which Henrietta assumes. Henriettas stock basis is $60,000.