Question

nyle Corp. owned 100 shares of Beta Corp. stock that it bought in 1993 for $9 per share. In 2014, when the fair market value of the Beta stock was $20 per share, Nyle distributed this stock to a noncorporate shareholder. Nyle's recognized gain on this distribution was:

Answer 1

Answer:

$1100.

Explanation:

We have been given that Nyle Corp. owned 100 shares of Beta Corp. stock that it bought in 1993 for $9 per share. In 2014, when the fair market value of the Beta stock was $20 per share.

Nyle's recognized gain on this distribution would be:

$\text{Value of 100 share at a rate of }\ 20\text{ per share }-\text{Value of 100 share at a rate of }\ 9\text{ per share}$

$\ 20\times100-\ 9\times 100=100(\ 20-\ 9)=100(\ 11)=\ 1100$

Therefore, Nyle's recognized gain on this distribution was $1100.