2. Amy owns 25% of ABC Corporation stock. She currently has$200,000 adjusted basis. She is a cash basis accounting taxpayer.ABC has indicated that they will issue a year-end, $270,000liquidating distribution to Amy for year 2016. This distributionwill be paid on January 3, 2017.
a) What is the amount of gain or loss that Amy will report in2016?
b) What about in 2017? Please explain in detail or providecalculations.
c) How would your answer differ if Amy was an accrual methodaccounting taxpayer.
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