Robin Corporation distributes equipment (basis of $80,000 and fair market value of $100,000)as a property dividend to its shareholders.The equipment is subject to a liability of $110,000.Robin Corporation recognizes gain of:
A)$0.
B)$20,000.
C)$30,000.
D)$110,000.
E)None of the above.

Question

Quizplus · Accepted Answer

Robin Corporation recognizes a gain of $30,000, which is the excess of the liability ($110,000) over the basis of the equipment ($80,000).

Robin Corporation Distributes Equipment (Basis of $80,000 and Fair Market