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 $175,000.
B. $150,000 gain recognized and a reduction in E&P of $175,000.
C. No gain recognized and a reduction in E&P of $200,000.
D. $150,000 gain recognized and a reduction in E&P of $200,000.
Answer: B
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The service cost component of a defined benefit pension plan is computed as the:
A. actual value of the change in the accrued pension liability. B. present value of the change in pension liability from additional employee service. C. present value of the change in the accrued pension liability. D. undiscounted change in pension liability from additional employee service.
Which of the following marketing information subsystems gathers information about events and happenings "outside" the firm?
A) marketing research B) marketing intelligence C) internal reports system D) consumer information support system E) external environment reporting system
A ____________________ is a book or file in which the firm’s accounting transactions are recorded in the order that they occur.
Fill in the blank(s) with the appropriate word(s).
Juanita works for Chevco but owns no Chevco stock. She buys 10 shares of a new issue of company stock as a savings plan and afterward receives the signed registration statement, which contains an untrue statement of material fact. Because she works for Chevco, she recognizes the error. Can she sue the auditor?
a. Yes, under Section 11, proof of reliance is usually not required. b. Yes, if she can prove she would not have bought the stock otherwise. c. No, because she did not rely on the statement. d. No, because there is no privity between Juanita and the auditor.