Close Corp. distributed cash and a parcel of land in a nonliquidating distribution to its sole shareholder. The following facts apply to this distribution:

Item Amount

Cash $50,000

Land Fair market value $30,000

Adjusted basis $40,000

Based on these facts, what amount of gain or loss should be recognized by Close Corp. as a result of this distribution?

a. $60,000 loss

b. No gain or loss should be recognized.

c. $40,000 gain

d. $10,000 loss