44) & 45) Pear Corporation distributes a piece of equipment to Peter, its 100% shareholder. The property has a FMV of $30,000 and an adjusted basis to Pear of $40,000. It is transferred to Peter subject to a mortgage of $8,000.

44) Assuming sufficient E & P to treat this transaction as a dividend to Peter, the effect of this transaction on the E & P of Pear is an increase of

a $22,000

b $30,000

c $32,000

d $42,000

45) Peter's basis in the property received is

a $22,000

b $30,000

c $32,000

d $42,000