Catamount Company Had Current and Accumulated E&P of $500,000 at December

question 30

Multiple Choice

Catamount Company 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, Caroline West. The land's fair market value was $200,000 and its tax and E&P basis to Catamount was $250,000. The tax consequences of the distribution to Catamount in 20X3 would be:

• A)No loss recognized and a reduction in E&P of $250,000.
• B)$50,000 loss recognized and a reduction in E&P of $250,000.
• C)$50,000 loss recognized and a reduction in E&P of $150,000.
• D)No loss recognized and a reduction in E&P of $200,000.

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Definitions:

Astigmatism

Blurring of the vision caused by an abnormal curvature of the cornea.

Blurred Vision

A decrease in eyesight sharpness and inability to see fine details, which can be a symptom of various eye conditions.

Ptosis

A drooping or falling of the upper eyelid, which may affect one or both eyes, due to various conditions.

Drooping

denotes sagging or declining in strength, vigor, or appearance; often refers to parts of the body.