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What income if any does i recognize as a result

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X Corporation ("X") has two shareholders: (i) P Corporation ("P ") which owns 90 shares (90%) ofX Corp. stock, with an adjusted basis of$70,000, and I individual ("I ") who owns 10 shares (10%) ofX Corp. stock, with an adjusted basis of$14,000. X has $100,000 E&P. X liquidated, pursuant to a plan of liquidation, and distributed all of its assets to P and I as follows: (i) Asset #1 (Al) fair market value ("FMV") $90,000 and adjusted basis ("AB") of $50,000 to P; and (ii) Asset #2 (A2) FMV $12,000 and AB $15,000, but subject to a $2,000 liability to I.

Problem a. What income, gain or loss, if any does X recognize as a result of the liquidation?

Problem b. What income, gain or loss, if any does I recognize as a result of the liquidation?

Problem c. What basis does I have in A2

Problem d. What basis does P have in Al?

Reference no: EM132785350

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