Assume That at the End of 2020, Clampett, Incorporated (An

question 151

Multiple Choice

Assume that at the end of 2020, Clampett, Incorporated (an S corporation) distributes property (fair market value of $40,000, basis of $5,000) to each of its four equal shareholders (aggregate distribution of $160,000) . At the time of the distribution, Clampett, Incorporated, has no corporate earnings and profits and J.D. has a basis of $50,000 in his Clampett, Incorporated, stock. What is J.D.'s stock basis after the distribution?

• A)$45,000
• B)$50,000
• C)$85,000
• D)$90,000
• E)None of the choices are correct.

---

Definitions:

Teratogen

Any agent that can disturb the development of an embryo or fetus, which may cause a birth defect.

Responsive

Being quick to react or respond appropriately to changes or requests, showing sensitivity to the needs or feelings of others.

Highly Active Fetus

A term used to describe a fetus that shows more frequent or vigorous movement in the womb than typically observed.

Low Activity Levels

Refers to a state or condition where there is a minimal amount of physical or mental exertion being exhibited.