Goose Corporation Makes a Property Distribution to Its Sole Shareholder,Michael

question 22

Multiple Choice

Goose Corporation makes a property distribution to its sole shareholder,Michael.The property distributed is a hunting cabin (fair market value of $270,000;basis of $220,000) that is subject to a $350,000 mortgage which Michael assumes.Before considering the consequences of the distribution,Goose's current E & P is $50,000 and its accumulated E & P is 200,000.Goose makes no other distributions during the current year.What is Goose's taxable gain on the distribution of the cabin?

• A)$0.
• B)$30,000.
• C)$50,000.
• D)$130,000.
• E)None of the above.

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