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The Smart Corporation distributes an office building to Collin, a shareholder of the corporation. The fair market value of the building exceeds its basis to

The Smart Corporation distributes an office building to Collin, a shareholder of the corporation. The fair market value of the building exceeds its basis to the corporation. Which of the following statements is true with regard to this transaction?

A.

Smart elects not to report the gain on this distribution.

B.

Smart realizes but does not recognize gain on this distribution.

C.

Collin must recognize the losses on this distribution on his return as a shareholder.

D.

Smart must recognize gain on this distribution.

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