An S Corporation Distributes Land with a Basis of $60,000

question 29

Multiple Choice

An S corporation distributes land with a basis of $60,000 and a FMV of $90,000 to its shareholders. The tax results of the distribution will be

• A)no gain to the corporation or to the shareholders.
• B)$30,000 of gain recognized by the S corporation and no pass through to the shareholders.
• C)no gain recognized by the corporation but $30,000 of gain recognized by the shareholders.
• D)$30,000 of gain recognized by the S corporation which is passed through to the shareholders.

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Definitions:

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A topical cream used to numb the skin, composed of a mixture of local anesthetics lidocaine and prilocaine, commonly used before minor medical procedures.