During the Year, T Corporation Distributed Land Used in Its

question 29

Multiple Choice

During the year, T Corporation distributed land used in its business to its sole shareholder.The land was worth $50,000 (basis, $10,000) .Assuming the corporation has substantial earnings and profits, and ignoring the effect of any taxes on the distribution, the net effect of the transaction on E&P will be

• A)An increase of $40,000
• B)A decrease of $50,000
• C)An increase of $10,000
• D)A decrease of $10,000
• E)None of the above

---

Definitions:

Risk-free Return

The theoretical return of an investment with zero risk, typically associated with government bonds.

Standard Deviation

Standard Deviation is a statistical measure that quantifies the amount of variation or dispersion of a set of values; in finance, it is commonly used to gauge the volatility of an investment.

Pension Funds

Investment pools that collect and manage funds contributed by employers and employees for future retirement benefits, investing in various assets for long-term growth.

Tax Deductible

Expenses that can be subtracted from gross income to reduce taxable income, effectively lowering the overall tax liability.