At the end of 2021, Mint, Inc, had accumulated earnings and profits (AEP) of ($210,000). During 2021, Mint, Inc. had current earnings and profits of $11,000. At year end, Mint distributes an asset to Hector (the sole shareholder of Mint) with a fair market value of $80,000 and an adjusted basis of $20,000. Hectors basis in Mint stock (prior to this distribution) is $100,000. Hector has substantial income from other sources and is in the 37% tax bracket.

a. Determine the tax consequences to Hector from receiving this distribution of property.

b. After the distribution, what is Hectors basis in Mint, Inc. stock?

c. What impact (if any) will this distribution have on Mints taxable income in 2021?

d. What is the ending balance in Mints Accumulated E&P after this distribution of property?