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) no gain to the corporation or 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) $30,000 of gain recognized by the S corporation which is passed through to the shareholder.
D) $30,000 of gain recognized by the S corporation which is passed through to the shareholder.
The gain of $30,000 ($90,000 - $60,000) is recognized and passed on to shareholder.
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