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Trolley Corp., which had earnings and profits of $500,000, made a non-liquidating distribution of property to its shareholders in Year 1 as a dividend in

Trolley Corp., which had earnings and profits of $500,000, made a non-liquidating distribution of property to its shareholders in Year 1 as a dividend in kind. This property, which had an adjusted basis of $20,000 and a fair market value of $30,000 at the date of distribution, did not constitute assets used in the active conduct of Trolleys business. How much gain did Trolley recognize on this distribution?

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