ACCT TAX

In 2018, a corporation distributed property with an adjusted basis of $100,000 and a fair market value of $140,000 to its shareholders. Its earnings and profits for 2018 were $170,000, and accumulated earnings and profits on January 1, 2018, were $370,000. What is the amount of gain recognized by the corporation on the distribution? 1. $0 2. $40,000 3. $70,000 4. $140,000 5. None of the above