Brothers a and B Each Owns 50 Percent of the Stock

question 58

Multiple Choice

Brothers A and B each owns 50 percent of the stock of P.P Corporation manufactures coats, and its wholly owned subsidiary, Q, manufactures ties.Q was acquired 20 years ago.During the current year, A and B squabbled over company policy and B decided he wanted to go his separate way.Accordingly, P distributed the stock of Q to B in exchange for all of B's stock in P, for which he had a basis of $15,000.The Q stock was worth $100,000.B will report

• A)Dividend income of $ 100,000
• B)Dividend income of $85,000
• C)Capital gain of $85,000
• D)No gain or loss
• E)None of the above

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Definitions:

PA

Physician Assistant, a healthcare professional licensed to practice medicine with physician supervision.

Radiopaque Contrast Medium

A substance used in medical imaging to improve the visibility of internal structures in radiographic procedures.

Spinal Cord

The central nerve trunk that extends from the brain down through the vertebral canal and is responsible for transmitting messages between the brain and the rest of the body.

X-Ray Record

A medical image created by using X-rays to visualize the internal structure of the body, often used for diagnostic purposes.