Corporation Z has an accumulated deficit of $100 in E&P as of December 31 of the preceding year. In addition, corporation Z is operating at a loss for the current year. Z has a valuable asset which if sold will generate a gain sufficient to eliminate the current years deficit in E&P and cause there to be positive earnings and profits. Rather than sell the asset in the current year and distribute the proceeds to shareholders as a dividend, Z borrows against the asset and distributes the loan funds to the shareholders. In the following year, Z sells the asset and pays off the loan.

	a.	There is a dividend in the current year because the borrowing and the delaying of the sale is a sham.
		b. The distribution will be a return of capital and potential gain to shareholders.
		c. a and b.
		d. None of the above. ***Explain how you got that answer?