Doug and Sally (unrelated individuals) own 60 percent and 40 percent respectively of the outstanding stock of Platt Corporation. Platt’s assets consist of land (Sec. 1231 property)

that was purchased in 2015 for $90,000 and now has current fair market value of $60,000 and other property that has a basis of $20,000 and a fair market value of $40,000. Pursuant to a plan of complete liquidation, Platt Corporation distributes the land to Doug and the other property to Sally on July 23, 2019.

a. How much gain and loss does Platt Corporation recognize on the liquidating distributions? Can you offer any suggestions that will improve the tax consequences of the liquidating distributions?

b. How would your answers to part a.

change if the land had instead been contributed as a capital contribution by Doug in 2015 when the land had a basis of $90,000 and a fair value of $95,000?