Osprey Corporation stock is owned by Pedro and Pittro, who are unrelated.

Pedro owns 50% and Pittro owns 50% of the stock in the corporation. Osprey has the following assets (none of which were acquired in a § 351 or contribution to capital transaction) that are distributed in complete liquidation of the corporation.

Assume that Osprey Corporation distributes the land to Pedro and the cash and equipment to Pittro.

a. Determine Osprey’s recognized gain or loss on the distribution of land.

b. Determine Osprey’s recognized gain or loss on the distribution of the equipment.

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Adjusted Fair Markert Value $300,000 440,000 Basis Cash Land Equipment $300,000 200,000 140,000 250,000