Assume That at the End of 2018, Clampett, Inc

question 129

Multiple Choice

Assume that at the end of 2018, Clampett, Inc. (an S corporation) distributes property (fair market value of $40,000, basis of $5,000) to each of its four equal shareholders (aggregate distribution of $160,000) . At the time of the distribution, Clampett, Inc. has no corporate E&P and J. D. has a basis of $50,000 in his Clampett, Inc. stock. What is J. D.'s stock basis after the distribution?

• A) $45,000.
• B) $50,000.
• C) $85,000.
• D) $90,000.
• E) None of the choices are correct.

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Definitions:

Global Variables

Variables declared outside any function, accessible by any part of the program.

Expressions

Combinations of variables, operations, values, and functions that are evaluated to produce another value in programming.

Variable Name

An identifier assigned to a storage location in memory to store values during a computer program's execution.

Declared

In programming, to specify the type and optionally the initial value of variables or functions before they are used.