61) Nicholson Corporation had current and accumulated E&P of $500,000 at December 31, 20X3. On December 31, the company made a distribution of land to its sole shareholder, Nola. The land's fair market value was $200,000 and its tax and E&P basis to Nicholson was $50,000. Nola assumed a liability of $25,000 attached to the land. The tax consequences of the distribution to Nicholson in 20X3 would be:

A) No gain recognized and a reduction in E&P of $200,000.

B) $150,000 gain recognized and a reduction in E&P of $200,000.