42. LO.7 Dove Corporation (E & P of $800,000) has 1,000 shares of stock outstanding.

The shares are owned as follows: Julia, 600 shares; Maxine ( Julia’s sister), 300 shares; and Janine ( Julia’s daughter), 100 shares. Dove owns land (basis $300,000, fair market value $260,000) that it purchased as an investment seven years ago.

Dove distributes the land to Julia in exchange for all of her shares in the corporation.

Julia had a basis of $275,000 in the shares. What are the tax consequences for both Dove and Julia if the distribution is:

a. A qualifying stock redemption?

b. A liquidating distribution?