Greg, a Cash Method of Accounting Taxpayer, Owns 100 Shares

question 74

Multiple Choice

Greg, a cash method of accounting taxpayer, owns 100 shares of Parker Corporation stock with a basis of $20,000. Greg receives two liquidating distributions of $8,000 on March 3 of last year, and $8,000 on August 8 of this year. The amount of the second distribution is not known until June 15 of this year. Greg recognizes

• A)a gain of $8,000 last year and a loss of $12,000 this year.
• B)a loss of $2,000 last year and a loss of $2,000 this year.
• C)no loss last year and a $4,000 loss this year.
• D)none of the above.

---

Definitions:

Expectations

Beliefs or hopes concerning what is possible or likely to happen in the future.

Equity

In a social context, it refers to fairness and justice in the distribution of resources and opportunities among all individuals.

Responsibility

The state or fact of having a duty to deal with something or of having control over someone.

Psychology Of Persuasion

Study of how people are influenced to change their attitudes or behaviors by messages and communication techniques.