23. LO.1, 4 Lime Corporation, with E & P of $500,000, distributes land (worth $300,000, adjusted basis

Question:

23. LO.1, 4 Lime Corporation, with E & P of $500,000, distributes land (worth $300,000, adjusted basis of $350,000) to Harry, its sole shareholder. The land is subject to a liability of $120,000, which Harry assumes. What are the tax consequences to Lime and to Harry?

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