Tar Heel Corporation Had Current and Accumulated E&P of $500,000

question 31

Multiple Choice

Tar Heel Corporation 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, William Roy. The land's fair market value was $100,000 and its tax and E&P basis to Tar Heel was $25,000. William assumed a mortgage attached to the land of $10,000. The tax consequences of the distribution to William in 20X3 would be:

• A)$100,000 dividend and a tax basis in the land of $100,000.
• B)$100,000 dividend and a tax basis in the land of $90,000.
• C)Dividend of $90,000 and a tax basis in the land of $100,000.
• D)Dividend of $90,000 and a tax basis in the land of $90,000.

---

Definitions:

Fetishists

Individuals who experience a form of sexual fixation or attraction to non-genital body parts or objects.

Sexual Dysfunction

Disorders related to any phase of the sexual response cycle that prevent the individual or couple from experiencing satisfaction.

Erectile Disorder

A sexual dysfunction characterized by the persistent difficulty in achieving or maintaining an erection sufficient for satisfactory sexual performance.

Sexual Desire Disorders

A subset of sexual dysfunction characterized by a decrease or absence of sexual fantasies and desire for sexual activity.