Zebra Corporation Has Always Been an S Corporation and Is

question 91

Essay

Zebra Corporation has always been an S corporation and is 100% owned by Paul. Paul has a basis of $40,000 in his Zebra stock at the beginning of the year. During the year, Zebra has an ordinary loss of $20,000 and a long-term capital gain of $10,000. In addition, Zebra Corporation distributed $55,000 in cash to Paul on December 1. Will the distribution cause Paul to recognize a gain? If so, what are its amount and character?

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Definitions:

African Americans

A term referring to citizens or residents of the United States who have ancestry from native populations of Africa.

Crowding Model

An economic theory that describes how public sector employment can impact wages and employment levels in the private sector.

Occupational Segregation

The crowding of women or minorities into less desirable, lower-paying occupations.