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.

A) Each shareholder has a $20,000 gain.

B) Each shareholder has a $20,000 gain and a $4,000 gain.

C) Each shareholder has a $4,000 gain.

D) Each shareholder has no gain or loss until selling the property.

E) None of the above.