Kristine Owns All of the Stock of a C Corporation

question 36

Multiple Choice

Kristine owns all of the stock of a C corporation which owns the following assets: Her adjusted basis for her stock is $270,000. Calculate Kristine's recognized gain or loss and classify it as capital or ordinary if she sells her stock for $500,000.

• A) $230,000 ordinary income.
• B) $230,000 capital gain.
• C) $115,000 ordinary income and $115,000 capital gain.
• D) $110,000 ordinary income and $120,000 capital gain.
• E) None of the above.

---

Definitions:

Intercostal Veins

Veins located between the ribs that drain blood from the chest wall and muscles back to the heart.

Intercostal Muscles

Muscles located between the ribs that assist with the breathing process by expanding and contracting the chest cavity.

Azygous Vein

A vein running up the right side of the thoracic vertebral column that drains blood from the chest wall and upper limbs back to the heart.

Subscapular

Pertaining to beneath the scapula or shoulder blade, often referring to muscles or vessels in that area.