Dr. Nick owns 100% of stock of the C corporation Hollywood Upstairs Medical College, Inc. (Hollywood). Hollywood has total E&P of $20,000 and Nick has a basis of $100,000 in his Hollywood stock prior to the following distribution. Hollywood makes a non-liquidating distribution to Nick of land held for investment. The land has a $90,000 adjusted basis and a fair market value of $400,000 at the time of the distribution. 

What is the amount and character of Nick's income from this distribution?

Answer rating: 100% (QA)

In this scenario Hollywood Upstairs Medical College Inc Hollywood is making a nonliquidating distrib... View the full answer