Corporation W owns 100% of the common stock of corporation Z with a basis of $300. Z owns a rental building (its only asset) with a gross fair market value of $3,000, subject to a non-recourse mortgage of $3,300. Zs adjusted basis for this building is $900. Z has $600 of E&P. Z is on the accrual method of accounting and reports on the calendar year. Z and W do not report on a consolidated basis. Z distributes the building to W in complete liquidation and W sells the building to Corporation V for $1,800 cash, subject to the debt.

a. W recognizes no gain or loss on the liquidation under Section 332.

b. Z recognizes $2,400 gain under Section 336.

c. Neither of the above.

d. Both A and B of the above.

please explain why you choose this answer