Amount Of Loss Recognition 538773

The stock of Hill Corp. is 60 percent owned by Joe and 40 percent owned by Joe’s brother, Bob. During 2012, Bob transferred land (basis of $300,000; FMV of $320,000) as a contribution to capital to Hill Corp. During March 2013, Hill Corp. adopted a plan of liquidation and subsequently made a pro rata distribution of the land back to the brothers. At the time of the liquidating distribution, the land had a FMV of $160,000. What amount of loss can be recognized by Hill Corp. on the distribution of land?

a. $0

b. $16,000

c. $40,000

d. $60,000