Jessica Owned 200 Shares of OK Corporation with a Basis

question 94

Multiple Choice

Jessica owned 200 shares of OK Corporation with a basis of $12,000 and a FMV of $24,000.Jessica received 20 stock rights as a nontaxable distribution with a total FMV of $8,000.Jessica sold the stock rights for $4,000.Jessica's gain or loss on the sale was

• A)$1,000.
• B)$3,000.
• C)$4,000.
• D)($4,000).

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Definitions:

Canada

A country in North America known for its vast landscapes, multicultural diversity, and being the second-largest country by total area.

Broadly Held Corporation

A corporation that has a large number of shareholders, with no single shareholder having a controlling interest.

Share Interest

The percentage of ownership an individual or entity holds in a company, measured through the proportion of shares owned.

Indebtedness

The state of owing money or being under financial obligation to another party.