t inc distributed land worth $21,000 (basis $18,000) used in its business to its sole shareholder, z corp. The land was subject to a mortgage of $5,000. Assuming that t has substantial E&P, z's dividend and basis for the property will be how much?

a. dividend of $16,000, basis of $16,000

b. dividend of $16,000 basis of $21,000

c. dividend of $21,000 basis of $16,000

d. dividend of $21,000 basis of $21,000