Puffin Corporation Makes a Property Distribution to Its Sole Shareholder

question 140

Multiple Choice

Puffin Corporation makes a property distribution to its sole shareholder, Bonnie. The property distributed is a car (basis of $30,000? fair market value of $20,000) that is subject to a $6,000 liability which Bonnie assumes. Puffin has no accumulated E & P and $30,000 of current E & P from other sources during the year. What is Puffin's E & P after taking into account the distribution of the car?

• A) $4,000
• B) $6,000
• C) $10,000
• D) $14,000
• E) None of the above

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Definitions:

Transactive Memory

Transactive memory is a psychological concept explaining how groups collectively store, recall, and share knowledge through the relationships among members.

Metastatements

Communications that provide commentary about other statements, often clarifying or interpreting them.

Persuasive Arguments Theory

View that people in groups are persuaded by novel information that supports their initial position, and thus become more extreme in their endorsement of their initial position.

Authoritative

Pertaining to or exhibiting authority; often related to a commanding or perceptive presence or figure.