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1. A corporation sells property (basis of $500,000) to its sole shareholder for $450,000, the fair...

1. A corporation sells property (basis of $500,000) to its sole shareholder for $450,000, the fair market value of the property. With respect to the sale: Does the corporation have a tax loss of $50,000? Why or why not?

2.MPC Corporation makes a property distribution on 12/31/16 to its sole shareholder, Jon. The property distributed is a house (fair market value of $500,000; basis of $300,000) that is subject to a $50,000 mortgage that Jon assumes. Before considering the consequences of the distribution, MPC’s current E & P before the distribution is $75,000 and its accumulated E & P is 100,000. MPC makes no other distributions during the current year.

What is MPCs taxable gain on the distribution of the house?

What is MPC’s current E&P after the distribution on 12/31/16?

What is Jon’s taxable gain (if any) and what type of gain is it?

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