Answer:
The correct answer is $230,000 gain.
Step-by-step explanation:
According to the scenario, the computation of the given data are as follows:
Fair value = $880,000
Basis = $650,000
So, we can calculate the gain or loss on the distribution by using following formula:
Gain or Loss = Fair value - Basis
By putting the value, we get
Gain or Loss = $880,000 - $650,000
= $230,000 ( Positive shows gain)
So, Gain = $230,000.