Edit question FACTS: Jack and Jill form a C corporation called Up The Hill (UTH) specializing in manufacturing and selling anti-rolling equipment

QUESTION #8 5 years after its formation, Up the Hill Corporation wants to pay dividends to its shareholders Jack and Jill. On 1/1 Year 6, it has accumulated E&P of $50,000 and current E&P of $50,000. It distributes property dividend with FMV $50,000; AB $20,000 to Jack and Jill at end of year and each property has a mortgage of $80,000

What is the amount of the property dividend to Jack and Jill? How much of the property dividend is taxable? What is Jack and Jills basis in the property? What is the effect to UTHs current E&P