A corporation distributes a truck it has owned for three years to its sole shareholder. The shareholder will use the truck for business activity. The truck’s fair market value at the time of the distribution is greater than its adjusted basis but less than its original cost. Does the corporation recognize a gain? If so, what is the character of the gain?

Sue peters is the controller at vroom, a car dealership. dale miller recently has been hired as the bookkeeper. dale wanted to attend a class in excel spreadsheets, so sue temporarily took over dale's duties, including overseeing a fund used for gas purchases before test drives. sue found a shortage in the fund and confronted dale when he returned to work. dale admitted that he occasionally uses the fund to pay for his own gas. sue estimated the shortage at $450. what should sue do?