Cedar Corp. reports current E\&P of $300,000 and accumulated E\&P of $0. On December 31, Cedar distributed land to Karl, its sole shareholder. The land's fair value was $100,000 and its adjusted basis (to Cedar) was $25,000. Karl assumed a liability on the land of $10,000. [question 1 of 2] How much dividend income does Karl recognize from the distribution, and what is his adjusted basis in the distributed land? $90,000 dividend: $90,000 basis $100,000 dividend; $100,000 basis $90,000 dividend; $100,000 basis $100,000 dividend; $90,000 basis Question 21 Cedar Corp. reports current E\&P of $300,000 and accumulated E\&P of $0. On December 31, Cedar distributed land to Karl, its sole shareholder. The land's fair value was $100,000 and its adjusted basis (to Cedar) was $25,000. Karl assumed a liability on the land of $10,000. [question 2 of 2] How much gain does Cedar recognize on the distribution? $0 $85,000 $65,000 $75,000