At the end of 2020 (before the Dec. 31 distribution), Ruth has a stock basis of $50,000 and RBG Corporation has a deficit in current E&P of $(2,000) and a deficit in accumulated E&P of ($80,000). On December 31, 2020, the corporation distributes another parcel of land with a fair market value of $80,000 and an adjusted basis of $35,000. Assume that Ruth is in the 37% tax bracket and that she does not have any capital transactions.

1. How much tax (if any) does Ruth owe from the distribution of this equipment?

b. What is Ruths basis in her stock following this distribution?