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| Kneenober Corp., an accrual-basis calendar-year C corporation, liquidated in 2011. In cancellation of all their Kneenober stock, each Kneenober shareholder received a liquidating distribution of $5,000 cash and land with a tax basis of $4,000 and a fair market value of $8,750. Before the distribution, each shareholder’s tax basis in Kneenober stock was $7,000. What amount of gain should each Kneenober shareholder recognize on the liquidating distribution? A. $2,000 B. $6,750 C. $0 D. $1,750 |