Puffin corporation makes a property distribution to its sole shareholder, bonnie. the property distributed is a building (basis of $30,000, fair market value of $200,000) that is subject to a $16,000 liability which bonnie assumes. puffin has no accumulated e& p and $30,000 of current e& p from other sources during the year. what is puffin's e& p after taking into account the distribution of the car

question 4 options:

$0

$6,000

$10,000

$16,000

none of the above.

correct option is $16,000

Explanation:

given data

basis = $30,000

fair market value = $200,000

liability = $16,000

current E&P = $30,000

to find out

Puffin's E&P after taking into account the distribution

solution

we know that E and P will decrease by higher of the adjusted basis and fair market value of the distributed property

so distribution loss is not taken into consideration to find out E and P

and we have given current E & P of Puffin is = $30,000 that is reduce to

reduce = basis - liability

reduce = $30000 - $16000 = $14000

so after distribution current E & P remaining will be $16000

so correct option is  $16,000

answer; i believe that the correct answer is (an elevator pitch);

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.