Barker Corp. distributed a building to its shareholder. The firm has plenty of E&, so the distribution will be classified as a "dividend." Barker Corp. had purchased the building 5 years ago for $625,000 and claimed $150,000 of depreciation.

The FMV of the building on the date of the distribution is $750.000. Further, there is a lien on the property of $120,000, that the shareholder will assume and pay.

What is the shareholders dividend income?

a)$750,000

b)$630,000

c)$625,000

d)$505,000

e)$475,000

What is Barker Corps income as a result of the distribution?

a)$275,000 cap gain

b)$125,000 cap gain, $150,000 ordinary income

c)$630,000 total gain

d)$120,000 total gain

e)$245,000 capital gain, $300,000 ordinary income