Navy Corporation Has E & P of $240,000

Multiple Choice

Navy Corporation has E & P of $240,000. It distributes land with a fair market value of $70,000 (adjusted basis of $25,000) to its sole shareholder, Troy. The land is subject to a liability of $55,000 that Troy assumes. Troy has:

A) A taxable dividend of $15,000.
B) A taxable dividend of $25,000.
C) A taxable dividend of $45,000.
D) A taxable dividend of $70,000.
E) A basis in the machinery of $55,000.