Puffin Corporation Makes a Property Distribution to Its Sole Shareholder

question 165

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 these.

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Definitions:

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Pertaining to thought processes or problem-solving approaches that do not involve systematic analysis, often relying on intuition or heuristic methods.

Knowledge-Based

Relates to systems or approaches that utilize a comprehensive collection of understanding or data to solve problems.

Nominal-Kind

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The cognitive process of grouping things based on shared characteristics or properties.