During the year, Oak Corporation distributed land worth $100,000 (basis $20,000) to one of its shareholders, T.The corporation will recognize gain if the distribution
A)Is treated as a dividend out of Oak's E&P
B)Qualifies for sale treatment under the basic redemption rules of § 302
C)Qualifies for sale treatment under the partial liquidation rules
D)More than one of the above answers is correct.
E)All of the above answers are correct.

Question

Quizplus · Accepted Answer

Oak Corporation will recognize gain on the distribution of appreciated property regardless of how the distribution is treated for the shareholder, whether as a dividend or a sale, due to the recognition of gain on the difference between the fair market value and the basis of the property distributed.

During the Year, Oak Corporation Distributed Land Worth $100,000 (Basis