Blue Corporation distributes property to its sole shareholder, Zeke. The property has a fair market value of $450,000, an adjusted basis of $305,000, and is subject to a liability of $250,000. Current E & P is $550,000. With respect to the distribution, Blue has a gain of:
A) $200,000 and Zeke has dividend income of $450,000.
B) $145,000 and Zeke's basis is the distributed property is $305,000.
C) $200,000 and Zeke's basis in the distributed property is $450,000.
D) $145,000 and Zeke has dividend income of $200,000.
E) None of the above.

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The Answer of Blue Corporation distributes property to its sole shareholder, Zeke. The property has a fair market value of $450,000, an adjusted basis of $305,000, and is subject to a liability of $250,000. Current E & P is $550,000. With respect to the distribution, Blue has a gain of:
A) $200,000 and Zeke has dividend income of $450,000.
B) $145,000 and Zeke's basis is the distributed property is $305,000.
C) $200,000 and Zeke's basis in the distributed property is $450,000.
D) $145,000 and Zeke has dividend income of $200,000.
E) None of the above.

Blue Corporation Distributes Property to Its Sole Shareholder, Zeke