Mary and Jane,unrelated taxpayers,own Gray Corporation's stock equally.One year before the complete liquidation of Gray,Mary transfers land (basis of $420,000,fair market value of $350,000)to Gray Corporation as a contribution to capital.Assume that Mary also contributed other property in the same transaction having a basis of $20,000 and fair market value of $95,000.In liquidation,Gray distributes the land to Jane.At the time of the liquidation,the land is worth $290,000.

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The Answer of Mary and Jane,unrelated taxpayers,own Gray Corporation's stock equally.One year before the complete liquidation of Gray,Mary transfers land (basis of $420,000,fair market value of $350,000)to Gray Corporation as a contribution to capital.Assume that Mary also contributed other property in the same transaction having a basis of $20,000 and fair market value of $95,000.In liquidation,Gray distributes the land to Jane.At the time of the liquidation,the land is worth $290,000.

Mary and Jane,unrelated Taxpayers,own Gray Corporation's Stock Equally