An S Corporation has four shareholders. The corporation has land with a fair market value of $100,000 and a basis of $20,000. The corporation distributes the land in-kind to the four shareholders. Each shareholders' basis in the corporation is $1,000. Assume the corporation has always been an S Corporation. Assume also that the AAA balance prior to the property distribution is zero.

Same facts as above, except the corporation has accumulated E&P of $16,000.

a.

Each shareholder has a gain of $20,000.

b.

Each shareholder has a dividend of $4,000.

c.

Each shareholder has a gain of $20,000 and a dividend of $4,000.

d.

Each shareholder has no gain or loss until the property is sold.

e.

None of the above.