F&D Inc Ceased Operations and Dissolved Under State Law in 2014

question 81

Multiple Choice

F&D Inc. ceased operations and dissolved under state law in 2014. Mrs. Herron, a 20% shareholder, received a $490,300 liquidating distribution from F&D. This year, the IRS determined that F&D underpaid its 2013 and 2014 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:

Risk Premiums

The additional return expected by an investor for tolerating the extra risk compared with a risk-free asset.

Expected Earnings Growth

The projected increase in earnings per share (EPS) over a specific period, often used by investors to gauge company performance.

LaPorta's Study

A series of influential research studies focusing on corporate governance, law, and finance across countries, often emphasizing the role of legal systems in financial development.

Earnings Announcements

Official public statements by companies about their financial performance for a specific period, which can affect their stock prices.