Catamount Company Had Current and Accumulated E&P of $510,000 at December

Multiple Choice

Catamount Company had current and accumulated E&P of $510,000 at December 31, 20X3. On December 31, the company made a distribution of land to its sole shareholder, Caroline West. The land's fair market value was $210,000 and its tax and E&P basis to Catamount was $255,000. The tax consequences of the distribution to Catamount in 20X3 would be:

A) No loss recognized and a reduction in E&P of $255,000.
B) $45,000 loss recognized and a reduction in E&P of $255,000.
C) $45,000 loss recognized and a reduction in E&P of $165,000.
D) No loss recognized and a reduction in E&P of $210,000.