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ValentinkaMS [17]
3 years ago
7

During 2011, Simon Kidman, the sole shareholder of a calendar year S corporation, received a distribution of $75,000. On Decembe

r 31, 2010, his stock basis was $24,000. The corporation earned $50,000 ordinary income during the year. It has no accumulated E & P. Which statement is correct?
a. Kidman's stock basis will be $2,000
b. Kidman's return of capital is $50,000
c. Kidman recognizes a $1,000 LTCG
d. Kidman's ordinary income is $64,000
e. None of the above
Business
1 answer:
liraira [26]3 years ago
3 0

Answer: c. Kidman recognizes a $1,000 LTCG

Explanation:

Long term gain can be calculated by the formula:

Capital gain = Distribution received - Basis in stock - Ordinary income earned

= 75,000 - 24,000 - 50,000

= $1,000

Long Term Capital gain is therefore $1,000.

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<h3>What is a split offering?</h3>

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Find out more on stock offerings at brainly.com/question/13049425.

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Answer:

In attachment.

Explanation:

In attachment.

Download docx
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Hope this helps! :)

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