The stock in Rose Corporation is held equally by two sisters. One year before its liquidation, the shareholders transfer property (basis of $500,000, fair market value of $300,000) to Rose Corporation in return for stock. In a current year liquidation, Rose Corporation transfers the property (now worth $250,000) pro rata to the sisters. What amount of loss will Rose Corporation recognize on the distribution?
(Give an explanation for yout answer)
a. $0.
b. $250,000.
c. $200,000.
d. $50,000.
e. None of the above