Please read carefully this tax accounting problem and answer $4$

questions below: Petrel Corporation has accumulated E & P of

$$85,000$ at the beginning of the year. Its current$-$year taxable

income is $$320,000.$ On December $31,$ Petrel distributed business

property $($worth $$140,000,$ adjusted basis of $$290,000)$ to Juan, its

sole shareholder. Juan assumes a $$70,000$ liability on the property.

Included in the determination of Petrel$$s current taxable income is

$$16,000$ of income recognized from an installment sale in a previous

year. In addition, the corporation incurred a Federal income tax

liability of $$112,000,$ paid life insurance premiums of $$4,500,$ and

received term life insurance proceeds of $$150,000$ on the death of

an officer.

A$.$ What is Juan$$s gross income from the distribution?

B$.$ What is the E & P of Petrel Corporation after the property

distribution?

C$.$ What is Juan$$s tax basis in the property received?

D$.$ How would your answers to $($a$)$ & $($b$)$ change if Petrel had

sold the property at its fair market value, used $$70,000$ of the

proceeds to pay off the liability, and distributed the remaining

cash and any tax savings to Juan?