1.) The Trap Corp. liquidates two shareholders, each owned 40% of the stock receives for the stock, machine worth $90,000 with a basis of $70,000 and warehouse worth $50,000 with a basis of $20,000. Trap Corp. will recognize?

A. $50,000 of sec 1231 gain

B. $50,000 of capital gain

C. $50,000 of ordinary income

D. $20,000 capital gain and $30,000 ordinary income

2.) Singles Apartments Corp. owned by three individuals show the following result for the year just ended:

Rental Income $150,000

Dividend Income $7,000

Interest Income $12,000

Depreciation $30,000

Mortgage Interest $80,000

Property Taxes $15,000

Dividend Paid $14,000

The following statements about Singles Apartments are true except:

A. the adjusted ordinary gross income is $24,000

B. the ordinary gross income is $169,000

C. personal holding company income is 19,000

D. adjusted gross income is $44,000