Brooks Corporation Distributes Property with a Basis of $20,000 and a Fair

Multiple Choice

Brooks Corporation distributes property with a basis of $20,000 and a fair market value of $25,000 to Caroline in complete liquidation of the corporation.Caroline's basis in the stock is $32,000.What must Caroline and Brooks report as income (loss) upon the liquidation of Brooks?
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Caroline Brooks

A) $(12,000) $(7,000)
B) $(12,000) $5,000
C) $(12,000) $-0-
D) $(7,000) $5,000