2 Jefferson Millinery Incorporated (JMI) decided to liquidate its wholly owned subsidiary, 8 Miles High Incorporated (8MH). 8MH had the following tax accounting balance sheet:| Description | FMV | Tax Basis | Appreciation ||-------------|----------|-----------|--------------|| Cash | $200,000 | $200,000 | || Building | $50,000 | $10,000 | $40,000 || Land | $150,000 | $90,000 | $60,000 || **Total** | $400,000 | $300,000 | $100,000 |**Required:**a. What amount of gain or loss does 8MH recognize in the complete liquidation?b. What amount of gain or loss does JMI recognize in the complete liquidation?c. What is JMI's tax basis in the building and land after the complete liquidation?**Complete this question by entering your answers in the tabs below.****What is JMI's adjusted tax basis in the building and land after the complete liquidation?***Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.*| | Building | Land ||------------|----------|------|| Tax basis | | |

Liquidation is a process that is undertaken to close down all the operations of a company by selling the assets to repay the liabilities & other expenses of the business.Jefferson Millinery, Inc. (JMI) decided to liquidate its wholly-owned subsidiary, 8 Miles High, Inc. (8MH). Since the liquidating distribution is to a corporation that is owing more than 80% of 8MH, 8MH does not recognize any gain or loss on the liquidation.Jefferson Millinery, Inc. (JMI) decided to liquidate its wholly-owned subsidiary, 8 Miles High, Inc. (8MH). Since the liquidating distribution is to a corporation that is owing more than 80% of 8MH, JMI does not recognize any gain or loss on the receipt from liquidation.The carryover tax basis in each of the assets of 8MH received would be the tax basis of JMI. In other words, JMI will inherit the tax basis of 8MH assets and liabilities.(a) Amount of gain or loss does 8MH recognize in the complete liquidation - $0.(b) Amount of gain or loss does JMI recognize in the complete liquidation - $0.(c) Carryover tax basis.