Achievement Corp has 2 unrelated shareholders including Curly who owns 40% with a stock basis of $300,000, and Phoenix who owns 60%. Achievement Corporation engages in a complete liquidation by distributing cash to Phoenix, and the following asset to Curly.

Description	FMV	Adjusted Basis	Notes
Equipment	360,000	600,000	Distributed to Curly (40% owner) Purchased 3-years ago for use in the business for $700,000 (100,000 of depreciation taken)

1. What amount of gain or loss does Curly recognize and what is the character of the gain or loss?

2. What amount of gain or loss does Achievement Corp recognize and what is the character of the gain or loss?