Note: use the following fact pattern for the next two questions.
Martin is a shareholder of Sand Pine Corp. After adopting a plan of liquidation, Sand Pine
makes a liquidating distribution to Martin of land with a fair value of $100,000 and an
adjusted basis (to Sand Pine) of $80,000. Martin's basis in the Sand Pine stock was
$50,000 before the distribution.
[question 1 of 2] How much gain does Martin recognize on the liquidating distribution,
and what is his basis in the distributed land?
$0 gain; $50,000 basis
$0 gain; $80,000 basis
$50,000 gain; $100,000 basis
$50,000 gain; $80,000 basis