1. The Beta Corporation owns a building with a basis of $20,000 that is subject to a debt of $40,000. The FMV of the building is $50,000. Beta distributes the property in a nonliquidating distribution (along with the debt) to Ben, its sole shareholder. What amount of gain or loss would Beta recognize on the distribution?

   		a. $30,000 loss.
   		b. $30,000 gain.
   		c. $50,000 gain.
   		d. $50,000 loss.
   		e. none of the above

2. The Beta Corporation owns a building with a basis of $20,000 that is subject to a debt of $40,000. The FMV of the building is $50,000. Beta distributes the property in a nonliquidating distribution (along with the debt) to Ben, its sole shareholder. What is Bens basis in the distributed property?

		a. $30,000.
		b. zero.
		c. $40,000.
		d. $50,000.
		e. none of the above

3. Oxen Corp. has 1,000 shares of common stock outstanding. Cherith owns 400 of these shares and Marshall owns 600. Marshalls total basis in his 600 shares is $40,000. Oxen has $500,000 of accumulated E&P as of the beginning of the year, and Oxen is profitable this year. Assume that Oxen redeems 210 shares of Marshalls stock during the year for $80,000. Marshall seeks to determine if the redemption qualifies for sale treatment as a disproportionate redemption under Section 302(b)(2). Would Marshall pass the 50% test under Section 302(b)(2)?

		a. yes.
		b. no.

4. Oxen Corp. has 1,000 shares of common stock outstanding. Cherith owns 400 of these shares and Marshall owns 600. Marshalls total basis in his 600 shares is $40,000. Oxen has $500,000 of accumulated E&P as of the beginning of the year, and Oxen is profitable this year. Assume that Oxen redeems 210 shares of Marshalls stock during the year for $80,000. Marshall seeks to determine if the redemption qualifies for sale treatment as a disproportionate redemption under Section 302(b)(2). Would Marshall pass the 80% test under Section 302(b)(2)?

		a. yes.
		b. no.

5. If a shareholder passes all applicable tests under Section 302(b)(2) the shareholder will receive:

		a. dividend treatment on the redemption.
		b. sale treatment on the redemption.