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Wills Corporation, which has accumulated a current E&P totaling $70,000, distributes land to its sole shareholder, an individual. The land has an FMV of $75,000 and an adjusted basis of $60,000. The shareholder assumes a $15,000 liability associated with the land. The transaction will have the following tax consequences.
A) The corporation will recognize a $15,000 gain; the shareholder will recognize dividend income of $75,000.
B) The corporation will recognize no gain; the shareholder will recognize dividend income of $75,000.
C) The corporation will recognize a $15,000 gain; the shareholder will recognize dividend income of $60,000.
D) The corporation will recognize no gain; the shareholder will recognize dividend income of $60,000.
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Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts

Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts


Edition: 27th
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strwbrrystrwbrry
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Every man, wherever he goes, is encompassed by a cloud of comforting convictions, which move with him like flies on a summer day.
   --Bertrand Russell, 1950

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