Puffin Corporation Makes a Property Distribution to Its Sole Shareholder

question 140

Multiple Choice

Puffin Corporation makes a property distribution to its sole shareholder, Bonnie. The property distributed is a car (basis of $30,000? fair market value of $20,000) that is subject to a $6,000 liability which Bonnie assumes. Puffin has no accumulated E & P and $30,000 of current E & P from other sources during the year. What is Puffin's E & P after taking into account the distribution of the car?

• A) $4,000
• B) $6,000
• C) $10,000
• D) $14,000
• E) None of the above