Prime Corporation adopts a plan of liquidation. It distributes an apartment building having a $9 million FMV and a $7.5 million adjusted basis, and land having a $1 million FMV and a $700,000 adjusted basis, to LOL Partnership in exchange for all the outstanding Prime stock. LOL Partnership has an $1,300,000 basis in its Prime stock. Prime has claimed $1,100,000 of MACRS depreciation on the building. LOL Partnership agrees to assume the $5 million mortgage on the land and building. All of Prime's assets other than the building and land are used to pay its federal income tax liability. Read the requirements. Requirement a. What are the amount and character of Prime's recognized gain or loss on the distribution? Begin by computing the gain or loss recognized. Select the formula then enter the amounts and compute the gain or loss recognized. (Enter amounts in whole numbers. Use a parentheses or minus sign for a loss.) FMV of land and building 9000000 Adjusted basis of land and building Gain (loss) recognized Requirements a. What are the amount and character of Prime's recognized gain or loss on the distribution? b. What are the amount and character of LOL Partnership's gain or loss on the liquidation? What is its basis for the land and building? c. How would your answer to Parts a and b change if the mortgage instead was $11 million? Print Done