Molokai Corporation Distributed a Building Valued at $45,000 (Basis of $20,000)

question 52

Multiple Choice

Molokai Corporation distributed a building valued at $45,000 (basis of $20,000) to its sole shareholder.What is the effect of this distribution on the corporation's taxable income?

• A)0
• B)$15,000 taxable gain
• C)$25,000 taxable gain
• D)$40,000 taxable gain

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Definitions:

Transverse Abdominis

A muscle layer of the anterior and lateral abdominal wall which is deep to (layered below) the internal oblique muscle.

Rectus Abdominis

A paired muscle running vertically on each side of the anterior wall of the human abdomen, involved in flexing the lumbar spine.

Pectoralis Group

A group of muscles located at the front of the chest, involved in movements of the shoulder and arm.

Clavicle

A long bone that serves as a strut between the shoulder blade and the sternum or breastbone, known colloquially as the collarbone.