Keisha Owns 100% of DEF Company and Has a Basis

question 22

Multiple Choice

Keisha owns 100% of DEF Company and has a basis of $10,000 in its stock.DEF has earnings and profits of $9,000 and distributes a cash dividend to Keisha of $12,000.Keisha has a:

• A)Capital gain of $2,000.
• B)Dividend of $12,000.
• C)Nontaxable distribution of $1,000.
• D)Nontaxable distribution of $3,000.

---

Definitions:

Fetal Health

The overall well-being and condition of a fetus during pregnancy, influenced by factors such as maternal health, nutrition, and exposure to teratogens.

Prematurity

A term used to describe babies born before 37 weeks of gestation, often associated with increased risk of complications and health issues.

Fetal Malnutrition

Inadequate nutrition received by the fetus during pregnancy, which can lead to health problems at birth and later in life.

Enriched Day-Care

A childcare setting that provides enhanced intellectual, social, and physical activities beyond basic caregiving.