Purple Corporation makes a property distribution to its sole shareholder, Kyung. The property distributed is...
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Purple Corporation makes a property distribution to its sole shareholder, Kyung. The property distributed is a house (fair market value of $189,000; basis of $154,000 ) that is subject to a $245,000 mortgage that Kyung assumes. Before considering the consequences of the distribution, Purple's current E \& P is $35,000 and its accumulated E \& P is $140,000. Purple makes no other distributions during the current year. What is Purple's taxable gain on the distribution of the house? a. $35.000 b. $21,000 c. $91.000 d. $0
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