Dixie Corporation Distributes $31,000 to Its Sole Shareholder, Sally

question 40

Multiple Choice

Dixie Corporation distributes $31,000 to its sole shareholder, Sally. At the time of the distribution, Dixie's E&P is $25,000 and Sally's basis in her Dixie stock is $10,000. Sally's basis in her Dixie stock after the distribution is

• A)$4,000.
• B)$10,000.
• C)$25,000.
• D)$31,000.

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Definitions:

Spongy Bone

Spongy bone, also known as cancellous bone, is less dense bone that is found at the ends of long bones and in the inner layers of other bones, characterized by a porous structure.

Diaphysis

The shaft or central part of a long bone, typically cylindrical in shape and containing the marrow cavity.

Epiphyseal Lines

Remnants of the epiphyseal plate in long bones, signifying the end of bone growth in length.

Articular Cartilage

A soft, white substance that envelops the ends of bones at their joint intersections, minimizing friction and cushioning impacts.