The Outstanding Stock of Riccardo Corporation Is Owned as Follows

question 28

Multiple Choice

The outstanding stock of Riccardo Corporation is owned as follows: Robert owns 50% of RMD, Inc. stock. The rest of RMD, Inc. stock is owned by unrelated parties. Riccardo Corporation redeems 90 of Kyle's shares of stock for $9,000 in the only redemption transaction this year. Kyle's basis for his stock is $10 per share. Riccardo Corporation has $300,000 in E&P. What is Kyle's total basis in his remaining 10 shares of stock after the redemption?

• A) 0
• B) $100
• C) $900
• D) $1,000

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Definitions:

Supplemental Payments

Extra payments received in addition to regular income, such as bonuses or overtime pay, which can affect a taxpayer's AGI.

Self-Employment Taxes

Taxes paid by self-employed individuals, covering Social Security and Medicare taxes, based on net earnings from self-employment.

Ceiling Amount

A maximum limit placed on the value, income, or other financial metric that can be used for calculations, such as determining eligibility for tax deductions or credits.

Multi-Part W-3

A comprehensive summary form submitted by employers to the IRS, detailing total earnings, tax withholdings, and other payroll information for employees.