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TB MC Qu.18-48(Algo) Tar Heel Corporation had current and accumulated... Tar Heel Corporation...

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Accounting

TB MC Qu.18-48(Algo) Tar Heel Corporation had current and accumulated...
Tar Heel Corporation had current and accumulated E&P of $410,000 on December 31203. On December 31, the company made a distribution of land to
its sole shareholder, William Roy. The land's fair market value was $115,000 and its tax and E&P adjusted tax basis to Tar Heel was $37,000. William
assumed a mortgage attached to the land of $16,000. The tax consequences of the distribution to William in 203 would be:
Multiple Choice
$115,000 dividend and an adjusted tax basis in the land of $115,000.
$115,000 dividend and an adjusted tax basis in the land of $99,000.
Dividend of $99,000 and adjusted tax basis in the land of $115,000.
Dividend of $99,000 and an adjusted tax basis in the land of $99,000.
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