Swan Corporation makes a property distribution on 12/31/13 to its sole shareholder, Matthew. The property distributed is a cottage (fair market value of $200,000; basis of $150,000) that is subject to a $35,000 mortgage that Matthew assumes. Before considering the consequences of the distribution, Swan's current E & P is $300,000 and its accumulated E & P is 100,000. Swan makes no other distributions during the current year.
What is Swan's taxable gain on the distribution of the cottage?
What is Swan's current E&P after the distribution on 12/31/13?
What is the taxable dividend to the shareholder (if any) ?
What is the shareholder's basis in hte cottage?
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