Vermont Corporation distributed packaging equipment that it no longer needed to Michael Jason who owns 20% of Vermont’s stock. The equipment, which was acquired in 2007, had an adjusted basis of $2,000 and a fair market value of $9,000 at the date of distribution. Vermont had properly deducted $6,000 of straight-line depreciation on the equipment while it was used in Vermont’s manufacturing activities. What amount of ordinary income must Vermont recognize as a result of the distribution of the equipment?

a. $0

b. $3,000

c. $6,000

d. $7,000