Wills Corporation, Which Has Accumulated a Current E&P Totaling $70,000

question 66

Multiple Choice

Wills Corporation, which has accumulated a current E&P totaling $70,000, distributes land to its sole shareholder, an individual. The land has an FMV of $75,000 and an adjusted basis of $60,000. The shareholder assumes a $15,000 liability associated with the land. The transaction will have the following tax consequences.

• A) The corporation will recognize a $15,000 gain; the shareholder will recognize dividend income of $60,000.
• B) The corporation will recognize no gain; the shareholder will recognize dividend income of $60,000.
• C) The corporation will recognize a $15,000 gain; the shareholder will recognize dividend income of $75,000.
• D) The corporation will recognize no gain; the shareholder will recognize dividend income of $75,000.

---

Definitions:

Consumer-To-Marketer

A communication or interaction dynamic where consumers directly convey their needs, preferences, or feedback to marketers or manufacturers.

Communication Capabilities

The range of tools and techniques an organization or individual possesses for effective information exchange.

Service Requests

Formal or informal requests made by customers or users for maintenance, support, or delivery of a service.

Customization

The process of making or altering a product or service according to the individual preferences or specifications of the customer.