Elvis Owns All of the Stock of Shadow Corporation

question 74

Multiple Choice

Elvis owns all of the stock of Shadow Corporation.The accumulated earnings and profits of Shadow Corporation at the end of the year are a deficit of $12,000.The current earnings and profits are $25,000.Elvis' basis for his stock is $290,000.He receives a distribution of $340,000 on the last day of the tax year.How much dividend income and/or capital gain should Elvis report?

• A)$0.
• B)Dividend income of $13,000 and capital gain of $37,000.
• C)Dividend income of $25,000 and capital gain of $25,000.
• D)Dividend income of $0 and capital gain of $50,000.
• E)None of the above.

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Definitions:

Volume

The amount of data generated.

Point Estimate

A single value estimate or guess of a population parameter based on sample data.

Sampling Error

The difference between the population parameter and the sample statistic due to chance variation in selecting a sample.

Nonsampling Error

Errors not related to the act of selecting a sample from the population but can occur during data collection, recording, or analysis stages.