P, Inc. (P) owns 90 percent of the outstanding stock of S, Inc. (S). Individual (I) owns the remaining 10 percent of S. Ps basis in its S stock is $3,000. Is basis in his S stock is $200. S has accumulated earnings and profits of $2,000 and the following assets: Asset Adjusted Basis FMV Land $3,000 $8,000 Equipment 2,500 1,000 Inventory 100 1,000 S wishes to liquidate and distribute all of its assets to its shareholders. What are the tax consequences to P, S and I in the following alternative situations? b) S distributes the equipment to I and the other assets to P. How might S improve this result?

questionc) What result in (b), above, if Ps basis in its S stock were $30,000 and S had a $30,000 basis in the land?