X Co. adopts a plan of complete liquidation and makes the following pro rata distributions to its shareholders (assume all are individuals):

A Cash $70,000

B Inventory FMV $20,000

Basis $20,000

Mortgage $10,000

C Inventory FMV $30,000

Basis $15,000

Mortgage $40,000

D Capital asset FMV $500

Basis $2,800

(Assume that X Co. acquired the property distributed to D in a Sec. 351 transfer 6 months before adopting the plan of liquidation when the FMV of the property was $800 and X co.'s basis was $2,800).

E Capital asset FMV $10,000

Basis $ 4,000

Each shareholder had a $1,000 basis in the X Co. stock.

X Co.'s recognized gain or loss on the distribution to:

11. A is:

a. 0

b. $70,000 capital gain

c. $69,000 capital gain

d. None of the above

12. B is:

a. 0

b. $10,000 ordinary income

c. $20,000 ordinary income

d. None of the above

13. C is:

a. $25,000 ordinary income

b. $35,000 ordinary income

c. $65,000 ordinary income

d. None of the above

14. D is:

a. 0

b. <$2,300> capital loss

c. <$300> capital loss

d. None of the above

15. E is:

a. 0

b. $10,000 capital gain

c. $ 6,000 capital gain

d. None of the above

The gain or loss recognized by:

16. A is:

a. 0

b. <$ 1,000> capital loss

c. $69,000 capital gain

d. None of the above

17. B is:

a. 0

b. $ 9,000 capital gain

c. $19,000 capital gain

d. None of the above

18. C is:

a. <$39,000> capital loss

b. $29,000 capital gain

c. <$11,000> capital loss

d. None of the above

19. D is:

a. $500 capital gain

b. <$500> capital loss

c. $1,800 capital gain

d. None of the above

20. E is:

a. 0

b. $9,000 capital gain

c. <$1,000> capital loss

d. None of the above

21. C's basis in the property received is:

a. $ 5,000

b. $30,000

c. $40,000

d. None of the above