Flag Butterfield Corporation has two equal shareholders, Maria and Tara. Butterfield Corporation has current E&P of $50,000 and a deficit in accumulated E&P of $40,000. On September 15, Butterfield Corporation distributes investment land to these shareholders. The land distributed to Maria has a fair market value of $30,000 and a basis to Butterfield Corporation of $24,000. The land distributed to Tara has a fair market value of $30,000 and a basis to Butterfield Corporation of $26,000. Marias basis for her stock is $2,000. Taras basis for her stock is $1,000. There are no other distributions this year.

a) Does Butterfield Corporation recognize any income or gain on the distribution of this land to its shareholders? If yes, how much?

b) How much income or gain (specify if dividend income or capital gain) does Maria recognize as a result of this distribution?

c) How much income or gain (specify if dividend income or capital gain) does Tara recognize as a result of this distribution?

d) What is Marias basis for the land she received?

e) What is Taras basis for the land she received?

f) What is Butterfield Corporations current and accumulated E&P after the distribution?