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.

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Definitions:

Weak Sexual Selection

A scenario in which the selection of mates based on certain traits is less pronounced, leading to minimal differences in reproductive success among individuals.

Cryptic Female Choice

Cryptic female choice refers to a form of sexual selection that arises after mating, when females store and separate sperm from different males and thus bias which sperm they use to fertilize their eggs.

Sperm Competition

Sperm competition is a form of sexual selection that arises after mating, when males compete for fertilization of a female’s eggs.

Sexual Selection

A mode of natural selection where certain traits increase an individual's chances of mating and reproduction.