1 A corporation owns a machine that has a basis of $10,000 and a fair market value of $8,000. The corporation distributes the machine to its sole shareholder. How much loss, if any, does the corporation recognize on the distribution. a. $0 b. $2,000 c. $8,000 d. $10,000

2. Paloma is the sole shareholder of Acme Corp. Acme Corp. had accumulated E & P of $200,000 at the beginning of 2019. Acme has current E & P for the entire year of $100,000. On January 1, Palomas basis in her stock is $100,000. On July 1, the corporation makes a distribution to her of cash of $300,000. On July 30, she sells her stock to Jamal for $250,000. On December 31, the corporation makes a distribution to Jamal of $75,000. On January 1, 2020, what is Jamals basis in his stock? a. $175,000 b. $225,000 c. $250,000 d. $325,000