Xavier is the sole shareholder of SimCo. On september 1 of Year 1, SimCo has $20,000 of Current E&P and $30,000 of Accumulated E&P. At that time Xavier's basis in SimCo is $50,000. On Sep 31 of Year 1, SimCo distributes its warehouse to Xavier. At the time of the distribution the warehouse has an adjusted basis of $100,000 and a fair market value of $30,000.

How much gain or loss must the SimCo recognize?

What tax planning advice would you give SimCo to improve its tax outcome?