General inertia corporation made a distribution of $50,000 to henry tiara in partial liquidation of the company on december 31, 20x3. henry owns 500 shares (50%) of general inertia. the distribution was in exchange for 250 shares of henry's stock in the company. after the partial liquidation, henry continued to own 50% of the remaining stock in general inertia. at the time of the distribution, the shares had a fair market value of $200 per share. henry's income tax basis in the shares was $100 per share. general inertia had total e& p of $800,000 at the time of the distribution. what are the tax consequences to henry because of the transaction?

You are the manager of a large crude-oil refinery. as part of the refining process, a certain heat exchanger (operated at high temperatures and with abrasive material flowing through it) must be replaced every year. the replacement and downtime cost in the first year is $165 comma 000. this cost is expected to increase due to inflation at a rate of 7% per year for six years (i.e. until the eoy 7), at which time this particular heat exchanger will no longer be needed. if the company's cost of capital is 15% per year, how much could you afford to spend for a higher quality heat exchanger so that these annual replacement and downtime costs could be eliminated?