Transcribed Image Text: s) Last year Mustang Corporation acquired land in a Section 351 tax-free

Transcribed Image Text: s) Last year Mustang Corporation acquired land in a Section 351 tax-free
exchange. On the date of transfer, the land had a basis $360,000 and a FMV of
$500,000.Mustang Corp. has two shareholders, Skylar and Mandy unrelated
individuals. Skylar owns 80% of the stock in Mustang and Mandy owns 20%.
The corporation adopts a plan of liquidation in the current year. On this date the
value of the land has decreased to $250,000. What is the effect of each of the
following on Mustang Corporation?
A. Distribute all the land to Skylar.
B. Distribute all the land to Mandy.
C. Distribute 50% of the land to Skylar and 50% to
Mandy.

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