Prob 2 XYZ corporation (E & P $1,000,000) distributes machinery, adjusted basis $60,000 Fair Market Value of $120,000 to sole shareholder-Johnson. The property is subject to Liability of $50,000 which shareholder assumes (A) How much dividend Johnson report (B) What is his basis in the machinery What is the effect on corporation's earnings and E&P Prob 2 XYZ corporation (E & P $1,000,000) distributes machinery, adjusted basis $60,000 Fair Market Value of $120,000 to sole shareholder-Johnson. The property is subject to Liability of $50,000 which shareholder assumes (A) How much dividend Johnson report (B) What is his basis in the machinery What is the effect on corporation's earnings and E&P