Star Corporation,in Complete Liquidation,makes Distributions to Its Two Shareholders B)

Star Corporation,in complete liquidation,makes distributions to its two shareholders.Tim surrenders his Star stock (adjusted basis of $70,000) to the corporation in exchange for land with a $90,000 adjusted basis and a $100,000 FMV.Lindsey receives $100,000 cash for her shares (adjusted basis $110,000) .What is the amount of gains and or losses recognized by Tim and Lindsey as a result of these transactions?

A) $$\begin{array} { | l | l | } \hline \text { Lim } & \text { Lindsey } \\\hline \$ 30,000 \text { gain realized, } \$ 0 \text { recognized; } & \begin{array} { l } \$ 0 \text { realized loss; } \$ 10,000 \text { recognized } \\\text { loss }\end{array} \\\hline\end{array}$$
B) $$\begin{array} { | l | l | } \hline \text { Lim } & \text { Lindsey } \\\hline \$ 30,000 \text { gain realized \& recognized; } & \begin{array} { l } \$ 0 \text { realized loss; } \$ 10,000 \text { recognized } \\\text { loss }\end{array} \\\hline\end{array}$$
C) $$\begin{array} {| l | l | } \hline \text { Tim } & \text { Lindsey } \\\hline 30,000 \text { gain realized, } \$ 0 \text { recognized; } & \$ 10,000 \text { loss realized and recognized } \\\hline\end{array}$$
D) $$\begin{array} {| l | l | } \hline \text { Tim } & \text { Lindsey } \\\hline 30,000 \text { gain realized \& recognized; } & \$ 10,000 \text { loss realized and recognized } \\\hline\end{array}$$

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