Pace Corp. Owns 100% of the stock of Strom Corp. Paces basis for the Strom Corp. Stock is $225,000. Pursuant to a plan of complete liquidation, Strom distributes to Pace assets with a fair market value of $800,000 and an adjusted basis of $300,000, along with liabilities of $100,000. At the time of liquidation, Strom has accumulated earnings and profits of $600,000.

1. How much a gain is recognized by Strom Corp. On the liquidating distribution to Pace Corp.?
2. How much gain is recognized by Pace as a result of the liquidation?
3. What tax basis does Pace Corp. Have for the assets it receives from Strom Corp.?
4. What happens to Paces $225,000 basis for its Strom stock?
5. What happens to Stroms $600,000 of accumulated earnings and profits?