A Corporation Sells Property (Basis of $90,000) to Its Sole

question 8

Multiple Choice

A corporation sells property (basis of $90,000) to its sole shareholder for $80,000, the fair market value of the property.With respect to the sale,

• A)The corporation has a tax loss of $10,000.
• B)The shareholder has a constructive dividend of $10,000.
• C)The shareholder has a basis of $80,000 in the property.
• D)The corporation does not recognize a tax loss but reduces its E & P account $90,000.
• E)None of the above.

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