After several years of operations, the business has become unprofitable and incurred small NOLs. Its operating assets currently have a $300,000 FMV and a $500,000 adjusted basis. Another corporation wants to purchase Knoxville Musical Sales' assets for $300,000. Knoxville expects to have approximately $200,000 in cash after the payment of its liabilities. Determine the tax consequences of the transaction if Knoxville adopts a plan of liquidation, selling the assets and distributing cash in redemption of the Knoxville Musical Sales stock within a 12-month period. Submit all your calculations for this assignment.