Catamount Company Had Current and Accumulated E&P of $510,000 at December

question 41

Multiple Choice

Catamount Company had current and accumulated E&P of $510,000 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 $210,000 and its tax and E&P basis to Catamount was $255,000. The tax consequences of the distribution to Catamount in 20X3 would be:

• A)No loss recognized and a reduction in E&P of $255,000.
• B)$45,000 loss recognized and a reduction in E&P of $255,000.
• C)$45,000 loss recognized and a reduction in E&P of $165,000.
• D)No loss recognized and a reduction in E&P of $210,000.

---

Definitions:

In-Group Bias

The tendency to favor individuals within our own group over those from outside groups.

Out-Group Bias

The tendency to have negative views or prejudices towards people who are perceived as belonging to a different group than one's own.

Discrimination

Unjust or prejudiced treatment of different categories of people, especially on the grounds of race, age, or sex.

Frustration

The feeling of being upset or annoyed, especially because of inability to change or achieve something.