M Corporation Makes a Distribution of $15,000 to Its Sole

question 33

Multiple Choice

M Corporation makes a distribution of $15,000 to its sole shareholder, Mr.Higgins.At the close of the year the corporation had $8,000 of accumulated and current earnings and profits.Mr.Higgins' basis in his stock is $5,000.He must report

• A)$8,000 in dividends and $7,000 capital gains
• B)$15,000 in dividends and no capital gains
• C)$8,000 in dividends and $2,000 capital gains
• D)$7,000 in dividends and $8,000 capital gains
• E)$13,000 in dividends and $2,000 capital gains

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Definitions:

Vertebral Foramen

The central canal in a vertebra through which the spinal cord passes, protected by the vertebral arch.

Tibia

The larger, stronger, and anterior of the two bones in the lower leg, commonly referred to as the shin bone.

Fibula

The smaller of the two bones in the lower leg, running parallel to the tibia and playing an important role in stabilizing the ankle.

Talus

A bone in the ankle that sits above the calcaneus (heel bone) and below the tibia (shinbone), critical for foot movement and stability.