A Corporation Distributes Land and the Related Liability to Meg

question 20

Multiple Choice

A corporation distributes land and the related liability to Meg, its sole shareholder. The land has an FMV of $60,000 and is subject to a liability of $70,000. The corporation has current and accumulated E&P of $80,000. The corporation's adjusted basis for the property is $70,000. What effect does the transaction have on the corporation?

• A)A recognized loss of $10,000; its E&P is reduced by $70,000.
• B)A recognized loss of $10,000; its E&P is unchanged.
• C)No recognized gain or loss; its E&P is reduced by $60,000.
• D)No recognized gain or loss; its E&P is unchanged by the distribution.

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Definitions:

Efficiency

The capacity to complete a task using the least amount of time and resources possible.

Maximum Cycle Time

The longest allowable period for completing a cycle or process from start to finish.

Efficiency

The ratio of useful output to total input, indicating the effectiveness with which resources are converted into outputs.

Network Diagram

A graphical representation of tasks, activities, or projects showing their sequential relationships and dependencies.