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%x PC:6-38 (similar to) Question Help Key Corporation adopts a plan of liquidation. It distributes an apartment building having a $9 million FMV and a $7.7 million adjusted basis, and land having a $6 million FMV and a $5,200,000 adjusted basis, to TSR Partnership in exchange for all the outstanding key stock. TSR Partnership has an $700,000 basis in its Key stock. Key has claimed $800,000 of MACRS depreciation on the building. TSR Partnership agrees to assume the $10 million mortgage on the land and building. All of Key'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 Key'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.) Gain (loss) recognized 3 of 5 (5 complete) HV t distributes an apartment building having a $9 million FMV and a $7.7 million adjusted basis, and land hav p in exchange for all the outstanding key stock. TSR Partnership has an $700,000 basis in its Key stock. K agrees to assume the $10 million mortgage on the land and building. All of Key's assets other than the buil Requirements hara mounts in W a. What are the amount and character of Key's recognized gain or loss on the distribution? b. What are the amount and character of TSR 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 $15.5 million? Print Done er in the input fields and then click Check Answer. Clear All