Selling a Business: 332 versus 338. On June 1 of this year, Public Corporation acquired all of the stock of Private Corporation from Seller for $1.5 million. Seller's basis for his stock was $200,000. Private's balance sheet on June 1 revealed the following information:

Assets	Adjusted Basis	Fair Market Value
Cash	$50,000	$50,000
Accounts receivable	475,000	475,000
Inventory	400,000	525,000
Equipment (net of depreciation)	170,000	350,000
Land	105,000	400,000
	$1,200,000	$1,800,000
Liabilities and Equity
Accounts payable	$300,000	$300,000
Retained earnings	700,000
Common stock	200,000	1,500,000
	$1,200,000	$1,800,000

In addition to the information above, an inspection of Private's prior tax returns indicated that the equipment was originally purchased in 2016 at a cost of $300,000. Private also has accumulated earnings and profits of $1,100,000 and a capital loss carryover of $90,000. Like all C corporations after 2017, Private is subject to a 21% flat tax rate.

1. What are the tax consequences to Seller on the sale of the stock to Public?
2. What are the tax consequences to Public and Private if Public liquidates Private shortly after the purchase and the 338 election is not made? Indicate the gains and losses realized and recognized for each corporation, the basis of Private's assets to Public and the treatment of Private's earnings and profits and capital loss carryover.
3. What are the tax consequences to Public and Private if Public liquidates Private shortly after the purchase and the 338 election is properly made? Indicate the gain or loss realized and recognized for each corporation, the basis of Private's assets to Public and the treatment of Private's earnings and profits and capital loss carryover.
4. Should the 338 election be made? Explain why or why not.