During the year, Maple Corporation distributed land worth $10,000 (basis $15,000) to one of its shareholders, R.The corporation will recognize loss if the distribution
A)Is treated as a dividend out of Maple'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)None of the above answers is correct.

Question

Quizplus · Accepted Answer

Corporations do not recognize a loss on property distributed to shareholders, whether the distribution is treated as a dividend, a redemption, or a partial liquidation. The tax treatment of the distribution affects the shareholder, but the corporation's basis in the distributed property does not allow for loss recognition upon distribution.

During the Year, Maple Corporation Distributed Land Worth $10,000 (Basis