X corporation has current E&P of $$30,000$ and accumulated E&P of $$20,000.$ It make a single distribution of inventory with a FMV of $$12,000$ and a tax basis of $$5,000$ to shareholder Jack. The inventory had debt on it of $$13,000$ and an E&P basis of $$7,000.$ The corporation is subject to a flat $21\%$ rate. Jack has zero dividend income.

True or

False