2. On 1/1/X5 X co. had accumulated earnings and profits of $50,000. During 20X5, X co. had current earnings and profits from operations of $70,000 and made the following distributions to its shareholders:

s/h Amount Date Stock basis

Reb $60,000 4/15/X5 $10,000

Dan Property FMV $250,000

Basis $220,000

Mortgage $10,000 8/14/X5 $40,000

Determine: (1) the recognized gain or loss reported by X co. due to the distributions; and (2)

the amount and character of the distribution to Reb and Dan.