Both Thu and Tuan Own One-Half of the Stock of Wren

question 41

Multiple Choice

Both Thu and Tuan own one-half of the stock of Wren, Inc., a C corporation. Each shareholder holds a stock basis of $175,000. Wren has accumulated E & P of $300,000. Wren's taxable income for the current year is $100,000, and it distributes $75,000 to each shareholder. Thu's stock basis at the end of the year is:

• A) $0.
• B) $100,000.
• C) $150,000.
• D) $175,000.

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