1) Pym Inc. which had earnings and profits of $100,000, distributed and to Alex Rowe, a stock holder Pym's adjusted basis for this land was $ 3,000. The land had a fair market value of $12,000 and was subject to a mortgage liability of $5,000, which was asumed by Rowe. HOw much of the distribution was taxable to Rowe as a dividend?

a) 9,000

b) 7,000

c) 4,000

d) 3,000

Please explain why.....