Evergreen Corporation distributes land with a fair market value of $50,000 to its sole shareholder. Evergreen's tax basis in the land is $200,000. Evergreen will report a tax loss of $150,000 on the distribution regardless of whether its earnings and profits are positive or negative.

Question

Quizplus · Accepted Answer

Losses are not recognized on distributions of property.

Evergreen Corporation Distributes Land with a Fair Market Value of $50,000