Tar Heel Corporation Had Current and Accumulated E&P of $500,000

question 31

Multiple Choice

Tar Heel Corporation had current and accumulated E&P of $500,000 at December 31 20X3. On December 31, the company made a distribution of land to its sole shareholder, William Roy. The land's fair market value was $100,000 and its tax and E&P basis to Tar Heel was $25,000. William assumed a mortgage attached to the land of $10,000. The tax consequences of the distribution to William in 20X3 would be:

• A)$100,000 dividend and a tax basis in the land of $100,000.
• B)$100,000 dividend and a tax basis in the land of $90,000.
• C)Dividend of $90,000 and a tax basis in the land of $100,000.
• D)Dividend of $90,000 and a tax basis in the land of $90,000.

---

Definitions:

Variability

A measure of the dispersion or spread of data points in a dataset, indicating how much the numbers differ from each other and from the mean.

Measures Of Variability

Statistics that describe the extent to which scores in a distribution differ from one another, including the range, variance, and standard deviation.

Spread

A statistical term describing the range, distance, or variance between data points in a dataset, indicating the variability within the data.

Scatter

In data visualization, a plot that displays the relationship between two or more variables by using dots to represent values.