1.The Tomato Corporation owns a building with a basis of $40,000 that is subject to a debt of $160,000. The FMV of the building is $100,000. Tomato distributes the property in a nonliquidating distribution (along with the debt) to Mitch, its sole shareholder. What is the amount of the distribution to Mitch?

		a. $80,000.
		b. $50,000.
		c. zero.
		d. $30,000.
		e. none of the above.

2.

The Hollow Corporation owns a building with a basis of $20,000 that is subject to a debt of $80,000. The FMV of the building is $100,000. Hollow distributes the property in a nonliquidating distribution (along with the debt) to Gina, its sole shareholder. What amount of gain or loss does Hollow recognize on the distribution?

		a. $80,000.
		b. $60,000.
		c. $20,000.
		d. $30,000.
		e. none of the above.