Beige,Inc,Has 3,000 Shares of Stock Authorized and 1,000 Shares Outstanding

question 138

Multiple Choice

Beige,Inc.,has 3,000 shares of stock authorized and 1,000 shares outstanding.The shares are owned by Sam (600 shares) and Lois (400 shares) .Sam's adjusted basis for his stock is $60,000 and Lois' adjusted basis for her stock is $40,000.Beige's earnings and profits are $300,000.Beige redeems 200 of Lois' shares for $100,000.Determine the amount of Lois' recognized gain (1) if she is Sam's mother and (2) if they are unrelated.

• A)$0 and $0.
• B)$100,000 and $60,000.
• C)$100,000 and $80,000.
• D)$100,000 and $100,000.
• E)None of the above.

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Definitions:

Day-To-Day Job Performance

The daily execution of tasks and responsibilities by an individual at their place of work.

Capabilities

The qualities, skills, or expertise that enable an individual or organization to perform effectively in specific tasks or achieve certain goals.

Inseparability

Characteristic of services that highlights the simultaneous production and consumption, making it impossible to separate the service from the service provider.

Service Provider

A company or entity that offers services to consumers or other businesses.