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

question 27

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

Harry Braverman

A Marxist scholar known for his work on labor and the degradation of work in capitalist societies, highlighting the separation of conception and execution in the labor process.

White-Collar Workers

Employees performing professional, managerial, or administrative work, typically characterized by higher education levels, office settings, and non-manual labor.

Bourgeois Exploitation

The economic and social exploitation of the working class by the capitalist class (bourgeoisie), as theorized in Marxist analysis, where the value produced by labor is appropriated by the owners of capital.

Functionalism

A sociological theory that emphasizes the interdependence of all parts of a society and how those parts work together to maintain stability.