1. Thunder Corporation, an S corporation, has no corporate E&P from years as a C corp. At the end of the year, it distributes a basketball court to its 50 percent shareholder, Sam Presti, in an operating distribution. The fair market value of the court is $80,000, and its tax basis is $50,000. Mr. Prestis basis in his stock is $15,000.

A. How much gain (loss) does Mr. Presti recognize as a result of the distribution (there may be more than one gain/loss recognized or none)?

B. What is Mr. Prestis basis in his stock after the distribution?

C. What is Mr. Prestis basis in the basketball court?

For parts D-F, instead assume the fair market value of the court was $30,000.

D. How much gain (loss) does Mr. Presti recognize as a result of the distribution (there may be more than one gain/loss recognized or none)?

E. What is Mr. Prestis basis in his stock after the distribution?

F. What is Mr. Prestis basis in the basketball court?

For parts G-I, assume the fair market value of the basketball court is $80,000, and the distribution is a liquidating distribution.

G. How much gain (loss) does Mr. Presti recognize as a result of the distribution (there may be more than one gain/loss recognized or none)?

H. What is Mr. Prestis basis in his stock after the distribution?

I. What is Mr. Prestis basis in the basketball court?

For parts J-L, assume the fair market value of the court was $30,000, and the distribution is a liquidating distribution.

J. How much gain (loss) does Mr. Presti recognize as a result of the distribution (there may be more than one gain/loss recognized or none)?

K. What is Mr. Prestis basis in his stock after the distribution?

L. What is Mr. Prestis basis in the basketball court?