osey Corporation distributes land with a fair market value of $20,000 and a basis of $12,000 to Brock, a shareholder. Posey's earnings and profits are $125,000. What must Brock report as income from the property distribution?
A) $- 0 -
B) $8,000
C) $12,000
D) $20,000

Question

Quizplus · Accepted Answer

Brock must report the fair market value of the distributed property, which is $20,000, as income. This is because distributions are generally taxed at their fair market value when received by the shareholder.

Osey Corporation Distributes Land with a Fair Market Value of $20,000