Complete Tax Research problem #C:4-64 on page "Corporations" 4-47 of your textbook

Scott and Lynn Brown each own 50% of the Benson Corporation Stock. During the current year, Benson made the following distributions to its shareholders:

Shareholder	Property Distributed	Adjusted Basis to Corp.	Propertys FMV
Scott Brown	Land Parcel A	$40,000	$75,000
Lynn Brown	Land parcel B	120,000	75,000

Benson has E&P of $250,000 immediately before the distribution. Prepare a memorandum for your tax manager explaining how Benson should treat these transactions for tax and financial accounting purposes. How will the shareholders report the distributions? Bensons tax rate is 21%. You can ignore the financial statement implications, just concentrate on the tax treatment.