F&D Inc Ceased Operations and Dissolved Under State Law in 2015

question 82

Multiple Choice

F&D Inc. ceased operations and dissolved under state law in 2015. Mrs. Herron, a 20% shareholder, received a $490,300 liquidating distribution from F&D. This year, the IRS determined that F&D underpaid its 2014 and 2015 income tax by $967,100. How much of this deficiency can the IRS assess against Mrs. Herron?

• A) -0-
• B) $193,420
• C) $490,300
• D) $967,100

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Definitions:

C + I

Represents the sum of consumption (C) and investment (I) in an economy, indicating total expenditures on goods and services.

C + S

Represents the sum of consumption (C) and savings (S), which together account for all disposable income in an economy.

Henry Ford

An American industrialist and founder of the Ford Motor Company, who revolutionized factory production with his assembly-line methods.

Wage-Price Flexibility

The ability of wages and prices to adjust freely in response to changes in supply and demand in the labor and goods markets.