Beige, Inc

question 1

Multiple Choice

Beige, Inc., has 3,000 shares of stock authorized and 1,000 shares outstanding. The shares are owned by Sam (700 shares) and Lois (300 shares) . Sam's adjusted basis for his stock is $100,000 and Lois' adjusted basis for her stock is $90,000. Beige's earnings and profits are $500,000. Beige redeems 200 of Lois' shares for $150,000. Determine the amount of Lois' recognized gain (1) if she is Sam's mother and (2) if they are unrelated.

• A)$0 and $0.
• B)$150,000 and $60,000.
• C)$150,000 and $90,000.
• D)$50,000 and $150,000.
• E)None of the above.

---

Definitions:

Lens

A transparent structure in the eye that focuses light rays onto the retina, enabling vision.

Light Waves

Oscillating electric and magnetic fields that propagate through space carrying electromagnetic energy.

Orange

A citrus fruit known for its vibrant color and sweet, tangy flavor, as well as the name of the color itself.

Red

A color at the end of the visible spectrum of light, next to orange and opposite violet, often associated with passion, danger, or energy.