Hogg Corporation Distributes $30,000 to Its Sole Shareholder, Ima

question 50

Multiple Choice

Hogg Corporation distributes $30,000 to its sole shareholder, Ima. At the time of the distribution, Hogg's E&P is $14,000 and Ima's basis in her stock is $10,000. Ima's gain from this transaction is a

• A)$6,000 capital gain.
• B)$14,000 capital gain.
• C)$20,000 capital gain.
• D)$30,000 capital gain.

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Definitions:

Management Structure

The hierarchical arrangement of lines of authority, communications, rights, and duties within an organization.

Franchise

A business model that allows individuals to own and operate their branch or location of an existing larger brand or business.

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The negative or less favorable aspects of a situation, decision, or business strategy.

Franchisor

A business entity that allows individuals or other businesses to operate a location or outlets under its brand name, providing a business model, brand, and support in exchange for fees and adherence to its operational guidelines.