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Peach Tree Corp. has accumulated earnings and profits (E&P) of $1,680,000 and no current E&P...

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Accounting

Peach Tree Corp. has accumulated earnings and profits (E&P) of $1,680,000 and no current E&P for the current year. On December 31st Peach Tree Corp. distributes to Grape, its sole shareholder a parcel of land with a basis of $1,560,000 and a fair market value of $1,200,000. Grape's basis in the stock is $600,000. Grape plans on growing fruit trees on this land.
What portion of the distribution to Grape will be treated as a dividend? Note: do not adjust earnings and profits for the tax effect of any gains or losses due to the distribution.
$360,000
$1,560,000
$600,000
$1,200,000
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