What is the tax impact to a C corporation or an S corporation when it makes a property distribution to a shareholder?
A) Recognizes loss only.
B) Recognizes gain but not loss.
C) Recognizes either gain or loss.
D) Does not recognize gain or loss.

Question

Quizplus · Accepted Answer

When a C corporation or an S corporation distributes property to a shareholder, it recognizes gain if the fair market value of the property exceeds its adjusted basis, but it does not recognize a loss if the adjusted basis exceeds the fair market value.

What Is the Tax Impact to a C Corporation or an S