Eagle Corporation Has Always Been an S Corporation

question 47

Essay

Eagle Corporation has always been an S corporation. Eagle is 100% owned by Katy. Katy's adjusted basis in the Eagle stock is $100,000 on January 1 of the current year. During the current year, Eagle distributes XYZ stock (a capital asset)to Katy. The XYZ stock has a $50,000 FMV and a $40,000 adjusted basis on Eagle's books. The XYZ stock has been held as an investment for four years by Eagle. Eagle Corporation reports $40,000 of ordinary income in the current year. What is Katy's basis in the Eagle stock at the beginning of the next year?

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Definitions:

Romance Of Teams

The idealized belief that teams are inherently superior to individuals in achieving tasks, often overlooking the potential downsides of teamwork.

Romantic Relationships

Intimate associations between individuals characterized by love, attachment, and commitment.

Romance Of Teams

The idealized belief that teams are always more effective, creative, and efficient than individual efforts.

Faith

Strong belief or trust in something or someone, often without empirical evidence, and frequently used in religious contexts.