64 Elvis Owns All of the Stock of White Corporation

question 17

Multiple Choice

64. Elvis owns all of the stock of White Corporation. The accumulated earnings and profits of White Corporation at the beginning of the year are a deficit of $20,000. The current earnings and profits are $30,000. Elvis’ basis for his stock is $250,000. He receives a distribution of $300,000 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 $30,000 and capital gain of $20,000.
• C) Dividend income of $30,000 and capital gain of $0.
• D) Dividend income of $10,000 and capital gain of $20,000.
• E) None of these.

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Definitions:

Conclusion

The final part of an argument, statement, or text where the outcome or decision is derived from the previously presented information or arguments.

Premises

Statements or propositions on which an argument is based or from which a conclusion is drawn.

Begging the Question

A logical fallacy in which the conclusion of an argument is assumed in the premise, essentially arguing in a circle.

Truth

The quality or state of being in accord with fact or reality.