Corporate Taxation Module 11 Exam Question 3 35 Points George is the sole shareholder of Washington Corporation. In 2023 he decides to liquidate the corporation and distribute the assets to himself and assume all liabilities. Immediately prior to the distribution, Washington has the following assets and liabilities. Book Basis Tax Basis Fair Market Value Cash 400,000 400,000 400,000 Installment Note Receivable 500,000 - 500,000 Equipment 100,000 100,000 - Land 100,000 100,000 500,000 Liabilities Payable 200,000 Common Stock 100,000 Retained Earnings 800,000 A What are the tax consequences to Washington Corporation as a result of the liquidating distribution? B What are the tax consequences to George as a result of the liquidating distribution? C Would your answer to Part B change if the liabilities assumed were contingent liabilities? If so, how? D Would (or could) your answer to Part A change if the installment note was as a result of the sale of assets, as part of a plan of liquidation? If so, how? E Would (or could) your answer to Part A change if the installment note was as a result of the sale of assets, as part of a plan of liquidation? If so, how.

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