On October 21, 2020, Strong Corp. distributes land to Jones, one of its shareholders. The land had a FMV of $78,000. The land had an adjusted basis in Strong Corp.'s hands of $38,000. Strong Corp. had pre-distribution current earnings and profits of $45,000 for the year ending December 31, 2020. It had no accumulated earnings and profits. Jones' adjusted basis in his stock is equal to $13,000.

(a) What is the amount of the distribution received by to Jones?

(b) Does Strong Corp have to recognize a gain on the distribution of the land to Jones and if so, what is the amount of the gain?

(c) What is the basis of the land in Jones' hands? (d) What is the character of the distribution received by Jones?

(e) What is the balance of Strong Corp's earnings and profits after the distribution of the land to Jones?