Beige, Inc

question 1

Multiple Choice

Beige, Inc., has 3,000 shares of stock authorized and 1,000 shares outstanding. The shares are owned by Sam (700 shares) and Lois (300 shares) . Sam's adjusted basis for his stock is $100,000 and Lois' adjusted basis for her stock is $90,000. Beige's earnings and profits are $500,000. Beige redeems 200 of Lois' shares for $150,000. Determine the amount of Lois' recognized gain (1) if she is Sam's mother and (2) if they are unrelated.

• A)$0 and $0.
• B)$150,000 and $60,000.
• C)$150,000 and $90,000.
• D)$50,000 and $150,000.
• E)None of the above.

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Definitions:

CS

Often short for "Conditioned Stimulus," a term used in classical conditioning to denote a previously neutral stimulus that, after being associated with an unconditioned stimulus, elicits a conditioned response.

Direct Experience

Knowledge or skill acquired through immediate observation or participation, without the intermediation of others or the use of technology.

Anticipate

The act of expecting or predicting something to happen in the future and possibly preparing for it.

Associative Learning

The process of learning in which a connection or association is formed between two stimuli or between a behavior and a stimulus.