Pace Corp. owns \(100 \%\) of the stock of Strom Corp. Pace's basis for the Strom Corp. stock is \(\$ 225,000\). Pursuant to a plan of complete liquidation, Strom distributes to Pace assets with a fair market value of \(\$ 800,000\) and an adjusted basis of \(\$ 300,000\), along with liabilities of \(\$ 100,000\). At the time of liquidation, Strom has accumulated earnings and profits of \(\$ 600,000\).

a. How much gain is recognized by Strom Corp. on the liquidating distribution to Pace Corp.?

b. How much gain is recognized by Pace as a result of the liquidation?

c. What tax basis does Pace Corp. have for the assets it receives from Strom Corp.?

d. What happens to Pace's \(\$ 225,000\) basis for its Strom stock?

e. What happens to Strom's \(\$ 600,000\) of accumulated earnings and profits?