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 2014 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, 2018.

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 2014 when the land had a basis of \(\$ 90,000\) and a fair value of \(\$ 95,000\) ?