Answer:
True
Explanation:
As for calculating the gain or loss on distribution of any asset, in any case the company shall consider the fair market value at the time of distribution, and accordingly, the gain or loss shall be:
Fair market value - Tax basis of such asset.
Here, in the given instance
Fair market value of land = $200,000
Tax basis of land = $50,000
Thus, gain on distribution = $200,000 - $50,000 = $150,000
This will not be different in any case, whether the earnings are positive or negative.
Therefore, the statement is True
