When Gail Dies,she Owns 100% of the Stock of an S

question 23

Multiple Choice

When Gail dies,she owns 100% of the stock of an S corporation,with an adjusted basis of $10,000 and FMV of $100,000.The AB and FMV of the assets inside the S corporation are the same amounts.Gail's son Phil inherits all of the stock,but does not wish to continue the business.Therefore,the S corporation sells the assets,resulting in a $90,000 capital gain,and liquidates.Assuming that Phil is subject to a marginal tax rate of 30%,what taxes are due?

• A)$0.
• B)$25,000.
• C)$27,000.
• D)$30,000.
• E)None of the above.

---

Definitions:

Farmers' Income

The earnings obtained by farmers for their labor and investment in agricultural activities, which can fluctuate significantly due to market and environmental conditions.

Agribusiness

The business sector encompassing farming and farming-related commercial activities, involving the production, distribution, and marketing of agricultural goods.

Government Policies

Rules, regulations, and actions taken by a government to control or influence its country's economy or society.

Price Subsidies

Financial assistance provided by governments to lower the cost of goods or services, making them more accessible to consumers.