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Big Corporation distributed land to its sole shareholder, Little Corporation, in a liquidating distribution. At the time of the distribution, the land had a fair market value of $240,000 and Big Corporation's adjusted basis in the land was $200,000. The land was encumbered by a $230,000 mortgage. How much gain did Big Corporation recognize as a result of the distribution?

a. 0.

b. $10,000.

c. $30,000.

d. $40,000.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M938529

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