Assume the same facts as in Problem 6-40 except, on January 2 of the current year, Gamma Corporation sells all property other than cash to Acquiring Corporation for FMV. Gamma pays off the accounts payable and retains cash to pay any tax liability resulting from Gamma€™s liquidation. Gamma then liquidates and distributes all remaining cash to Marsha. Assume that Gamma has no other taxable income or loss. Determine the tax consequence to Gamma, Acquiring, and Marsha. How do these results compare to those in Problem 6-40?
In problem 6-40
Marsha owns 100% of Gamma Corporation€™s common stock. Gamma is an accrual basis calendar year corporation. Marsha formed the corporation six years ago by transferring $250,000 of cash in exchange for the Gamma stock. Thus, she has held the stock for six years and has a $250,000 adjusted basis in the stock. Gamma€™s balance sheet at January 1 of the current year is as follows:

Gamma has held the marketable securities for two years. In addition, Gamma has claimed $60,000 of MACRS depreciation on the machinery and $90,000 of straight-line depreciation on the building. On January 2 of the current year,

Assets Basis FMV Cash S 400,000 S 400,000 Marketable securities 50,000 125,000 350,000 275,000 300,000 Inventory Equipment Building 200,000 500,000 750,000 Total S1,450,000 Liabilities and Equity Accounts payable S 175,000 S 175,000 Common stock 250,000 1,725,000 Retained earnings (and E&P) Total $1,450,000 $1,900,000