A corporation distributes land and the related liability to Meg, its sole shareholder. The land has a FMV of $60,000 and is subject to a liability of $70,000. The corporation has current and accumulated E&P of $80,000. The corporation's adjusted basis for the property is $70,000. What effect does the transaction have on the corporation?

a. A recognized loss of $10,000 and its E&P is reduced by $70,000.

b. A recognized loss of $10,000 and its E&P is unchanged.

c. No recognized gain or loss and its E&P is reduced by $60,000.

d. No recognized gain or loss and its E&P is unchanged by the distribution.