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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Definitions:

Competitive Price-Taker

A firm or individual in a market structure that has no control over the market price and must accept the prevailing market price for its product or service.

Output

The total amount of goods or services produced by a person, machine, company, or economy.

Price

The sum of money needed to buy a product or service.

Competitive Price-Taker

A firm in a competitive market that has no ability to influence the price of the product it sells; it must take the market price as given.