Cavalier Corporation Had Current and Accumulated E&P of $500,000 at December

question 64

Multiple Choice

Cavalier 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, Tom Jefferson. The land's fair market value was $200,000 and its tax and E&P basis to Cavalier was $50,000. The tax consequences of the distribution to Cavalier in 20X3 would be:

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

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Definitions:

Bed Rest

A medical recommendation for patients to stay in bed without physical activity, aimed at promoting recovery from an illness, injury, or surgery.

Braden Scale

A tool used in healthcare to predict the risk of developing pressure ulcers in patients, based on factors such as mobility, activity, and nutrition.

Skin Assessment

The process of examining the skin to identify any conditions or abnormalities.

Fluid Intake

The measurement and monitoring of the amount of liquid consumed by an individual.