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: FMV Adjusted

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

FMV Adjusted Basis Appreciation

Cash $ 242,500 $ 242,500

Building 82,750 23,250 59,500

Land 159,750 91,500 68,250

Total $ 485,000 $ 357,250 $ 127,750

a. What amount of gain or loss does 8MH recognize in the complete liquidation?(Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if

applicable.)

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

c. What is JMI's tax basis in the building and land after the complete liquidation?

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