Bev and Cabel Each Own One-Half of the Stock of Finch,Inc.,a

question 127

Multiple Choice

Bev and Cabel each own one-half of the stock of Finch,Inc.,a C corporation.Each shareholder has a stock basis of $225,000.Finch has accumulated E & P of $600,000.Finch's taxable income for the current year is $100,000,and it distributes $180,000 to each shareholder.Bev's stock basis at the end of the year is:

• A)$0.
• B)$45,000.
• C)$95,000.
• D)$100,000.
• E)None of the above.

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Definitions:

Maximum Sales

The highest potential or actual sales volume that can be achieved under current market conditions and operational capabilities.

Sales Wisdom

The accumulated knowledge and experience about effective sales techniques, customer behavior, and market dynamics.

Product Line

A group of related products that are marketed under a single brand name by the same company.

Account Penetration

The degree to which a company has been successful in selling its products or services to various departments or levels within a targeted client's organization.