Judy Is a Cash Basis Attorney

question 12

True/False

Judy is a cash basis attorney. In 2017, she performed services in connection with the formation of a corporation and received stock with a value of $4,000 for her services. By the end of the year, the value of the stock had decreased to $2,000. She continued to hold the stock. Judy must recognize $4,000 of gross income from the stock for 2017.

---

Definitions:

Treasury Shares

Shares of stock that were issued and later repurchased by the issuing company, reducing the amount of outstanding stock on the open market.