Exercise $20-17($Algorithmic$)($LO$.1)$ Exercise $20-17($Algorithmic$)($LO$.1)$

Osprey Corporation stock is owned by Pedro and Pittro, who are unrelated. Pedro and Pittro each own $50\%$ of the

stock in the corporation. Osprey has the following assets $($none of which were acquired in a $351$ or contribution to

capital transaction$)$ that are distributed in complete liquidation of the corporation.

Assume that Osprey Corporation distributes the land to Pedro and the cash and equipment to Pittro.

a$.$ Determine Osprey's recognized gain or loss on the distribution of land.

Osprey recognizes a

of $

on the distribution of the land.

b$.$ Determine Osprey's recognized gain or loss on the distribution of the equipment.

Osprey realizes a

of $

on the equipment, of which $q$

is

recognized.

Osprey Corporation stock is owned by Pedro and Pittro, who are unrelated. Pedro and Pittro each own $50\%$ of the stock in the corporation. Osprey has the following assets $($none of which were acquired in a $351$ or contribution to capital transaction$)$ that are distributed in complete liquidation of the corporation.

Adjusted

Basis Fair Market

Value

Cash $$385,000$ $$385,000$

Land $231,000577,500$

Equipment $308,000192,500$

Assume that Osprey Corporation distributes the land to Pedro and the cash and equipment to Pittro.

a$.$ Determine Osprey's recognized gain or loss on the distribution of land.

Osprey recognizes a

of $fill in the blank $2$

on the distribution of the land.

b$.$ Determine Osprey's recognized gain or loss on the distribution of the equipment.

Osprey realizes a

of $fill in the blank $4$

on the equipment, of which $fill in the blank $5$

is recognized.