Greg, a Cash Method of Accounting Taxpayer, Owns 100 Shares

question 74

Multiple Choice

Greg, a cash method of accounting taxpayer, owns 100 shares of Parker Corporation stock with a basis of $20,000. Greg receives two liquidating distributions of $8,000 on March 3 of last year, and $8,000 on August 8 of this year. The amount of the second distribution is not known until June 15 of this year. Greg recognizes

• A)a gain of $8,000 last year and a loss of $12,000 this year.
• B)a loss of $2,000 last year and a loss of $2,000 this year.
• C)no loss last year and a $4,000 loss this year.
• D)none of the above.

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