Oxen Corporation Incurs the Following Transactions

question 75

Multiple Choice

Oxen Corporation incurs the following transactions. Oxen maintains a valid S election and does not distribute any assets cash or property) to its sole shareholder, Megan.As a result, Megan must recognize ignore 20% QBI deduction) :

• A)Ordinary income of $103,000.
• B)Ordinary income of $103,000 and long-term capital gain of $6,000.
• C)Ordinary income of $103,000, long-term capital gain of $10,000, and $4,000 short-term capital loss.
• D)Ordinary income of $109,000.

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Definitions:

Household Members

Individuals who reside in the same dwelling, sharing living accommodations and possibly familial or economic ties.

Seller's Warranties

Guarantees made by a seller regarding the condition, quality, or performance of a product.

Implied Warranty of Merchantability

A legal assurance that goods sold meet minimum quality standards and are fit for the purpose sold.

Trade Usage

Established practices or patterns of behavior regularly observed and accepted in a particular industry.