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

question 27

Multiple Choice

Catamount Company had current and accumulated E&P of $500,000 at December 31,year 1.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 year 1 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:

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The main or most significant classification into which a subject or object is placed based on its defining characteristics.

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Indra Nooyi

Former CEO of PepsiCo, known for her leadership and innovative business strategies.