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

Question

Quizplus · Accepted Answer

When a C corporation or an S corporation makes a property distribution to a shareholder, it recognizes gain but not loss. The corporation must recognize gain as if it sold the property at fair market value, but it cannot recognize a loss on the distribution.

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