1. Corp MH owns 80 shares of Corp X, and NJH, an individual, owns the other 20 shares. HJH'S total basis in her shares is $20. Corp X liquidates by distributing $800 in cash to Corp MH, and land worth $200 ( with a basis to Corp X of $500) to NJH. Corp.X has no debt.
a) result?
b) Would you answer change if the land's basis to Corp x was only $100?
c) Would you answer change if the land secured as a $1,100 mortgage?
2. I own 100 common shares of Corp X, my total basis being $200. What tax result from the following transactions?
a) In 2008, Corp X distributes 1 preferred share for each share of common held by each shareholder (so I get 100) at a time when its E&P is $1,000.
b) In 2009, I sell 50 of the preferred shares for $150.
c) Does your answer to a. above change if other shareholders got common shares instead of preferred.
d) Does your answer to b. change if I sold all the shares of Corp X (common and preferred) that I owned?