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.

The gain or loss recognized by:

16. A is: a. 0 b. 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. capital loss b. $29,000 capital gain c. capital loss d. None of the above

19. D is: a. $500 capital gain b. capital loss c. $1,800 capital gain d. None of the above

20. E is: a. 0 b. $9,000 capital gain c. capital loss d. None of the above

21. Cs basis in the property received is: a. $ 5,000 b. $30,000 c. $40,000 d. None of the above