LO.6 A corporation distributes a truck it has owned for three years to its sole shareholder. The

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LO.6 A corporation distributes a truck it has owned for three years to its sole shareholder.

The shareholder will use the truck for business activity. The truck’s fair market value at the time of the distribution is greater than its adjusted basis, but less than its original cost. Does the corporation recognize a gain? If so, what is the character of the gain?

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