Jones Mills, Inc. (JMI) decided to liquidate its whollyowned subsidiary, Most Help, Inc. (MH). MH had the following tax accounting balance sheet.

 

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

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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Adjusted Basis FMV Appreciation Cash $ 200,000 $ 200,000 10,000 Building 40,000 50,000 Land (50,000) 150,000 200,000 $ (10,000) Total $ 410,000 $ 400,000