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A Shareholder Has Capital Gain Only to the Extent That

question 4

True/False

A shareholder has capital gain only to the extent that S corporation distributions to him exceed his basis in the stock plus the amount of corporate debt owed to him.


Definitions:

Institutionalization

The process of establishing something as a norm or standard within a society or organization.

Voidable

A legal term referring to a contract or action that can be invalidated or annulled by one or more of the parties involved.

Disaffirmance

The legal act of renouncing or nullifying a contract or agreement, particularly by minors or those not completely competent to enter into a contract.

Tort of Deceit

A legal wrong involving intentional misrepresentation or concealment of truth leading to damage or harm to another party.

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