J Purchased 100 Shares of C Common Stock in 2007

question 19

Multiple Choice

J purchased 100 shares of C common stock in 2007 for $1,000.J purchased another 100 shares in 2012 for $10,000.In the current year, C adopts a plan of liquidation and distributes $8,000 to J as the first installment ($4,000 for each block) .J's recognized gain or loss on the distribution is

• A)$3,000 loss
• B)$0 gain or loss
• C)$3,000 gain
• D)$8,000 gain

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Definitions:

Familiarity Effect

The tendency to develop a preference for things merely because they are familiar.

Repeated

Occurring or done again and again, often to achieve a particular effect or to reinforce a concept or skill.

Social Cognition

The process of understanding how people think about themselves and others, including how they interpret, analyze, remember, and use information about the social world.

Social Psychology

The scientific study of how people's thoughts, feelings, and behaviors are influenced by the actual, imagined, or implied presence of others.