Salon, Inc. distributed cash and personal property to its sole shareholder. Using the following facts, determine the amount of gain that would be recognized by Salon, Inc. as the result of making the distribution to its shareholder?
|
Item |
Amount |
|
|
Cash |
$20,000 |
|
|
Personal property: |
||
|
Fair market value |
6,000 |
|
|
Adjusted basis |
3,000 |
|
|
Liability on property assumed by shareholder |
10,000 |
|
- $ 3,000
- $ 4,000
- $ 7,000
- $23,000