Identify Which of the Following Statements Is True

Multiple Choice

Identify which of the following statements is true.

A) The FMV of an obligation is used to determine the E&P reduction when a corporation distributes the obligation to its shareholders.
B) When appreciated property is distributed to shareholders, E&P must be increased by any gain (net of taxes) recognized due to the property distribution.
C) When appreciated property is distributed in a nonliquidating distribution, the net effect on the distributing corporation's E&P is that it is reduced by the net of the FMV of the property distributed minus the gain (net of federal income taxes) recognized due to the property distribution.
D) Only B and C above are true.