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AleksAgata [21]
3 years ago
11

During the year, Gary, the sole shareholder of a calendar year S corporation, received a distribution of $16,000. At the end of

last year, his stock basis was $4,000. The corporation earned $11,000 ordinary income during the year. It has no accumulated E & P. Which statement is correct?a. Gary recognizes a $1,000 LTCG.b. Gary’s stock basis is $2,000.c. Gary’s ordinary income is $15,000.d. Gary’s tax-free return of capital is $11,000.
Business
1 answer:
Marat540 [252]3 years ago
8 0

Answer: a. Gary recognizes a $1,000 LTCG

Explanation:

Long Term Capital Gain is calculated by the formula:

= Distribution from company - Basis in stock - Ordinary income earned during the year

= 16,000 - 4,000 - 11,000

= $1,000

First statement is therefore correct that Gary would recognize an LTCG of $1,000.

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In digital forensics, all investigations follow the same basic methodology. which of the following should be performed first in
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Answer:

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Explanation:

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2 years ago
At a price of $2,000 per unit, the demand for Rancho 60 mountain bikes from Peyton Bike's Inc. is 300 units, which is the number
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<h3>Why are bikes in short supply?</h3>

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4 0
2 years ago
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3 0
3 years ago
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3 0
3 years ago
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