When Tyson Dies, He Owns 100% of the Stock of an S

question 1

Multiple Choice

When Tyson dies, he owns 100% of the stock of an S corporation, with an adjusted basis of $300,000 and FMV of $500,000.The adjusted basis and FMV of the assets, all of which are capital, of the S corporation are the same amounts.Tyson's son inherits all of the stock, but does not wish to continue the business.Therefore, the S corporation sells the assets, resulting in a $200,000 gain and liquidates.Assuming the son has a marginal tax rate of 30%, what taxes are due?

• A)$0.
• B)$60,000.
• C)$90,000.
• D)$150,000.
• E)None of the above.

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