1. How much gain (loss) does Mr. Presti recognize as a result of the distribution (there may be more than one gain/loss recognized or none)?
2. What is Mr. Prestis basis in his stock after the distribution?
3. What is Mr. Prestis basis in the basketball court?

3. (20 points) Thunder Corporation, an S corporation, has no corporate E&P from years as a C corp. At the end of the year, it distributes a basketball court to its 50 percent shareholder, Sam Presti, in an operating distribution. The fair market value of the court is $80,000, and its tax basis is $50,000. Mr. Presti's basis in his stock is $15,000