Emma Corporation stock is owned by Austin and Kate, who are unrelated. Austin owns 80% and Kate owns 20% of the stock in the corporation. Emma Corporation has cash (basis $600,000, FMV $600,000), equipment (basis $150,000, FMV $200,000 and a building (basis $400,000, FMV $200,000). All are distributed in complete liquidation of the corporation. Emma decided to distribute the equipment to Kate and the cash and the building to Austin. Determine the total amount of gain or (loss) Emma recognizes on distribution.

$0

($150,000)

$50,000

($200,000)