An S corporation distributes land with a basis of $60,000 and a FMV of $90,000 to its shareholder. The tax results of the distribution will be
A. $30,000 of gain recognized by the S corporation which is passed through to the shareholder.
B. $30,000 of gain recognized by the S corporation and no pass-through to the shareholder.
C. no gain recognized by the corporation but $30,000 of gain recognized by the shareholder.
D. no gain to the corporation or to the shareholder.
Answer: A
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