At the beginning of the year, Jenny, Inc. (a corporation for tax purposes) had a negative $15,000 in E&P. During the year, the company had $5,000 in profits. On July 1, the company distributed property with an adjusted basis of $50,000 and a fair market value of $40,000 to Jenny (an individual), the sole shareholder of the corporation. It was the only distribution that the company made during the year. Jenny's stock in the company had a fair market value of $50,000 and an adjusted basis of $20,000. Please address the following: What is the amount of the distribution to Jenny? What are the federal tax consequences to Jenny of the distribution? What are the federal tax consequences to Jenny, Inc. of the distribution? What alternative transaction would have given Jenny and Jenny Inc.a better result here? DO NOT COPY FROM EXISTING CHEGG Q/A