82. Montclair Corporation had current and accumulated E&P of $500,000 at December 31, 20X3. On December...

 

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82. Montclair Corporation had current and accumulated E&P of $500,000 at December 31, 20X3. On December 31, the company made a distribution of land to its sole shareholder, Molly Pitcher. The land's fair market value was $200,000 and its tax and E&P basis to Montclair was $50,000. Molly assumed a liability of $25,000 attached to the land. The tax consequences of the distribution to Montclair in 20X3 would be: A. No gain recognized and a reduction in E&P of $200,000 B. $150,000 gain recognized and a reduction in E&P of $200,000 C. $150,000 gain recognized and a reduction in E&P of $175,000 D. No gain recognized and a reduction in E&P of $175,000 82. Montclair Corporation had current and accumulated E&P of $500,000 at December 31, 20X3. On December 31, the company made a distribution of land to its sole shareholder, Molly Pitcher. The land's fair market value was $200,000 and its tax and E&P basis to Montclair was $50,000. Molly assumed a liability of $25,000 attached to the land. The tax consequences of the distribution to Montclair in 20X3 would be: A. No gain recognized and a reduction in E&P of $200,000 B. $150,000 gain recognized and a reduction in E&P of $200,000 C. $150,000 gain recognized and a reduction in E&P of $175,000 D. No gain recognized and a reduction in E&P of $175,000

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