PROBLEMS 1. P, Inc. ("P") owns 90 percent of the outstanding stock of S, Inc. (S). Individual ("T") owns the remaining 10 percent of S. P's basis in its S stock is 2 CHAPTER 7 COMPLETE LIQUIDATIONS TA Asset A Land Adjusted Basis Fair Market Value $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? (a) S distributes the inventory to I and the other assets to P. (b) S distributes the equipment to I and the other assets to P. How might Simprove this result? (c) What result in (b), above, if P's basis in its S stock were $30,000 and S had a $30,000 basis in the land? (d) Is (e), above, a situation where P might wish to avoid the application of $ 332? Why? How might this be accomplished? Consider in this regard the $ 332 qualification requirements and how a parent might assure that they are not met. $3,000. I's basis in his S stock is $200. S has accumulated earnings and profits of $2,000 and the following assets