Catamount Company had current and accumulated E&P of $500,000 at December 31, 20X3. On December 31, the company made a distribution of land to its sole shareholder, Caroline West. The land's fair market value was $200,000 and its tax and E&P basis to Catamount was $250,000. The tax consequences of the distribution to Catamount in 20X3 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 $50,000 loss recognized and a reduction in E&P of $150,000 No loss recognized and a reduction in E&P of $200,000