1. The stock of Hawk Corporation is owned equally by three sisters, Michele, Melanie, and Miranda. Hawk owns land (basis of $250,000, fair market value of $210,000) that it has held for investment for eight years. When Michele's basis in her stock is $225,000, Hawk distributes the land to her in exchange for all of her shares. What are the tax consequenses for both Hawk and Michele if the distribution is:
a. A qualifying redemption?
b. A liquidating distribution?

2. Pursuant to a complete liquidation, Oriole Corporation distributes to its shareholders land held for three years as an investment (adjust basis of $400,000, fair market value of $600,000). The land is subject to liability of $300,000.
a. What are the tax consequences to Oriole Corporation on the distribution of the land?
b. If the land is, instead, subject to liability of $700,000, what are the tax consequences to Oriole on the distribution?

3. The stock of Magenta Corporation is owned by Fuchsia Corporation (95%) and Marta (5%). Magenta is liquidated on September 2, 2009, pursuant to a plan of liquidation adopted earlier in the same year. In the liquidation, Magenta distributes various assets worth $2,375,000 (basis of $1.2 million) to Fuchsia (basis of $1.6 million in Magenta stock) and a parcel of land worth $125,000 (basis of $105,000) to Marta (basis of $40,000 in Magenta stock.) Assuming the Section338 election is not made, what are the tax consequenses of the liquidation to magenta, Fuchsia, and Marta?