Lamont Is a 100% Owner of JKL Corporation

question 126

Essay

Lamont is a 100% owner of JKL Corporation.JKL has been an S corporation since its inception in 2017.During 2018,JKL distributed $20,000 to Lamont.During 2018,JKL reported $5,000 of business income and no separately stated items.What is the amount and character of the gain on the distribution,if any,Lamont must recognize in each of the following alternative scenarios? Also,what is Lamont's stock basis at the end of 2018 in each of the following scenarios?
a.Lamont's stock basis at the beginning of 2018 was $30,000.
b.Lamont's stock basis at the beginning of 2018 was $4,000.

Understand the basic legal nature and powers of corporations, including implied powers.

Recognize the requirements and implications of corporate naming conventions and incorporation.

Identify different structures and types of corporations in various jurisdictions.

Explain the legal concept of a corporation as a separate legal entity and its implications.

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Definitions:

Backstage

The places where we rehearse and prepare for our performances.

Erving Goffman

A sociologist known for his work in symbolic interactionism and his studies on social interaction, identity, and the presentation of self in everyday life.

Impression Management

The process by which individuals attempt to control the perceptions others have of them, often by adjusting their behavior or appearance.

Personal Front

The performance tactics we use to present ourselves to others, including appearance, costume, and manner.