1.

The Delia Corporation owns a building with a basis of $200,000. The FMV of the building is $180,000. Delia distributes the property in a nonliquidating distribution to Paul, its sole shareholder. What is Pauls basis in the distributed property?

		a. $200,000.
		b. $180.000.

2.If a shareholder passes the 50% test and the first 80% test under Section 302(b)(2) but does not pass the second 80% test, the shareholder will receive:

		a. dividend treatment on the redemption.
		b. sale treatment on the redemption.