Wills Corporation, Which Has Accumulated a Current E&P Totaling $65,000

question 71

Multiple Choice

Wills Corporation, which has accumulated a current E&P totaling $65,000, distributes land to its sole shareholder, an individual. The land has an FMV of $75,000 and an adjusted basis of $55,000. The shareholder assumes a $15,000 liability associated with the land. The shareholder will recognize

• A)$60,000 of dividend income and have a $60,000 basis in the land.
• B)$65,000 of dividend income and have a $75,000 basis in the land.
• C)$60,000 of dividend income and have a $75,000 basis in the land.
• D)$65,000 of dividend income and have a $65,000 basis in the land.

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Definitions:

Plasma Proteins

Proteins present in blood plasma, including albumin, globulins, and fibrinogen, that perform essential roles in blood clotting, defense against pathogens, and transport of substances.

Erythrocytes

Red blood cells that carry oxygen from the lungs to the body's tissues and carbon dioxide back to the lungs.

Glucose

A simple sugar that is an important energy source in living organisms and is a component of many carbohydrates.

Renal Corpuscle

A structure in the kidney that includes the glomerulus and Bowman's capsule, where blood filtration begins.