Clampett,Inc

question 114

Multiple Choice

Clampett,Inc.has been an S corporation since its inception.On July 15,2018,Clampett,Inc.distributed $50,000 to J.D.His basis in his Clampett,Inc.stock on January 1,2018,was $45,000.For 2018,J.D.was allocated $10,000 of ordinary income from Clampett,Inc.and no separately stated items.What is the amount of income J.D.recognizes related to Clampett,Inc.in 2018?

• A) $60,000.
• B) $50,000.
• C) $20,000.
• D) $10,000.
• E) None of the choices are correct.

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Definitions:

Cash Flows

The net amount of cash and cash-equivalents being transferred into and out of a business.

Intra-Entity Transfers

Transactions of goods, services, or funds that occur between units within the same organization.

Consolidated Statement

A financial statement that aggregates the financials of a parent company and its subsidiaries into one document.

Cash Flows

The total amount of money being transferred into and out of a business, influencing its liquidity, operational capability, and financial health.