Carver Land Company (CLC) had current and accumulated E&P of $500,000 at December 31, 20X2. On December 31, the company made a distribution of land to its sole shareholder, Betty Parker. The land's fair market value was $200,000 and its tax and E&P adjusted tax basis to CLC was $250,000. The tax consequences of the distribution to CLC in 20X2 would be: No loss recognized and a reduction in E&P of $250,000. $50,000 loss recognized and a reduction in E&P of $250,000. No loss recognized and a reduction in E&P of $200,000. $50,000 loss recognized and a reduction in E&P of $150,000.