Jefferson Millinery Inc (JMI) decided to liquidate its wholly owned subsidiary, 8 Miles High Inc (8MH) 8MH had the following tax accounting balance sheet (Leave no answer blank Enter zero if applicable ) FMV Adjusted Basis Appreciation Cash $ 265,000 $ 265,000 Building 78,000 34,500 43,500 Land 187,000 120,500 66,500 Total $ 530,000 $ 420,000 $ 110,000 a What amount of gain or loss does 8MH recognize in the complete liquidation b What amount of gain or loss does JMI recognize in the complete liquidation c What is JMIs tax basis in the building and land after the complete liquidation

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Question: Jefferson Millinery Inc. (JMI) decided to liquidate its wholly owned subsidiary, 8 Miles High Inc. (8MH). 8MH had the following tax accounting balance sheet: (Leave

Jefferson Millinery Inc. (JMI) decided to liquidate its wholly owned subsidiary, 8 Miles High Inc. (8MH). 8MH had the following tax accounting balance sheet: (Leave no answer blank. Enter zero if applicable.)

	FMV		Adjusted Basis		Appreciation
Cash	$	265,000	$	265,000
Building		78,000		34,500		43,500
Land		187,000		120,500		66,500
Total	$	530,000	$	420,000	$	110,000

a. What amount of gain or loss does 8MH recognize in the complete liquidation?

b. What amount of gain or loss does JMI recognize in the complete liquidation?

c. What is JMIs tax basis in the building and land after the complete liquidation?

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