Serenity Receives a Nonliquidating Distribution from the Hickock Corporation, an S

question 54

Multiple Choice

Serenity receives a nonliquidating distribution from the Hickock Corporation, an S corporation. Which of the following statements concerning nonliquidating distributions from an S corporation are correct?
I.A nonliquidating cash distribution is taxable if the amount distributed exceeds Serenity's basis in Hickock.
II.The amount of the dividend on a nonliquidating distribution of property is the fair market value of the property distributed.
​

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

---

Definitions:

SNAP

The Supplemental Nutrition Assistance Program, a federal aid program providing food-purchasing assistance for low- and no-income people in the U.S.

Income Mobility

The extent to which individuals or households can move up or down the income distribution ladder within a society over time.

Wealth Inequality

The unequal distribution of assets among a population.

Income Quintile

A statistical measure dividing the population into five equal groups based on income levels, to analyze economic inequality.