At the time of its liquidation under § 332, Cardinal Corporation (E&P of $420,000) had the following assets and liabilities:

• Cash ($175,000);

• Marketable securities (fair market value of $310,000, basis of $150,000);

• Unimproved land (fair market value of $510,000, basis of $400,000);

• Unsecured note payable ($50,000);

• Mortgage on the unimproved land ($350,000).

Cardinal also had a general business credit carryover of $25,000. Wren Corporation acquired all the stock of Cardinal seven years ago for $390,000.

a. How much gain (or loss) will Cardinal Corporation recognize upon the liquidating distribution of its assets and liabilities to Wren Corporation?

b. How much gain (or loss) will Wren Corporation recognize in the liquidation of Cardinal?

c. What basis will Wren have in the marketable securities and unimproved land it receives in the liquidation?

d. What happens to Cardinal’s E&P and general business credit carryover?