Mike and michelle decided to liquidate their jointly owned

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Mike and Michelle decided to liquidate their jointly owned corporation, Pennsylvania Corporation. After liquidating its remaining inventory and paying off its remaining liabilities, Pennsylvania had the following tax accounting balance sheet. FMV: Cash: $200,000 Building: $200,000 Land: $100,000 Total : $500,000 Tax-Adjusted Basis: Cash: $200,000 Building: $100,000 Land: $150,000 Total : $450,000 Appreciation : Cash: Building: $100,000 Land: Total : $50,000 Under the terms of agreement, Mike will receive the $200,000 cash in exchange for his 40% interest in Pennsylvania. Mike's tax basis in his Pennsylvania stock is $50,000. Michelle will receive the building and land in exchange for her 60% interest in Pennsylvania. Her tax basis in the Pennsylvania stock is $100,000. What amount of gain or loss does Pennsylvania recognize in the complete liquidation?

Reference no: EM13481231

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